Scientists are beginning to measure how good someone is at making decisions in risky situations.
It emerged from these tests that highly-educated individuals often also have difficulty interpreting information on risk probabilities. "However, if we want to have educated citizens who make decisions based on information, we need people who understand information about risks," explains the scientist. Seen in this way, risk intelligence is just as important a skill as reading and writing. "Fortunately," he adds, "it can also be learned." In fact, as the researchers discovered over the five years of testing various tasks, risk intelligence is closely linked with mathematical skills.
Isn't risk intelligence critical in a world of gyrating global finance and Climate Destabilization?
Ruth, this is great! I surely hope they get the tutorials going so we can develop our skills. Of course, I suppose a good math book would do the same. Given that so much rhetoric and hyperbole enters our daily discourse, w could use a good dose of rationality. Thanks. I am passing this on.
I love scientific things and I’m almost always in the mood to learn something new, but I’m not buying this thing at all. In my opinion, this is nothing more than a bunch of pompous academics trying to justify something they want to be true. I know several people who barely finished high school and thus would be unable to know how to solve the math problems presented in the exam. Since I know these people, though, I know that they have not made bad decisions. Their lives are still on a good track. In some ways they’re doing better than me.
Now if you want to say that there’s a correlation between good decision making and education I’m willing to agree with that theory to a point; however, I doubt one’s ability to do math has anything to do with the validity of the correlation. In my opinion, a number of things that are almost always present in someone with a reasonable education such as: the environment they grew up in; the amount of food they have to eat; their health status; their happiness level; their financial situation; and more have much more to do with a person’s ability to make good decisions than does their ability to solve math problems.
Typically when a person makes bad decisions they do so because they’re desperate to fill a need in their life. If someone is feeling a desperate need their ability to solve math problems will have nothing to do with their ability to make good decisions when attempting to get that need satisfied. Simply put, the well educated are statistically more likely to make better decisions because they are statistically less likely to be making decisions out of desperation.
"In my opinion, this is nothing more than a bunch of pompous academics trying to justify something they want to be true."
The Max Planck Society is Germany's most successful research organization. Since its establishment in 1948, no fewer than 17 Nobel laureates have emerged from the ranks of its scientists, putting it on a par with the best and most prestigious research institutions worldwide.
Appeal to authority? …hey, mea culpa.
Anyway, some more info on developing the testing protocols.
"Tests exist for evaluating personality, intelligence and memory. However, up to now, it was not easily possible to find out how good someone is at making decisions in risky situations. “Yet this is an important skill that has an enormous influence on many of our decisions,” says psychologist Edward Cokely, who came up with the idea of developing a quick test for this skill at the Max Planck Institute for Human Development in 2007. In the intervening five years, he has carried out 21 sub-studies in 15 countries with colleagues from Max Planck Director Gerd Gigerenzer's group at the Institute in Berlin and the Michigan Technological University."
I'm an easy pushover! Once a pushover, always one?
I watched the Institute for New International Economic Thinking (INET), first day of their conference, "Paradigm Lost"; one panel on statistics, What Can Economists Know?" left me bewildered and in addition there was a woman presenter that curled my toenails and whitened my hair. She appeared to me as a comic act imitating a female economist.
The fellow from Australia who is developing a model of economic theory, Steve Keen, makes sense when I listen to him, except his Kiwi accent challenges my understanding.
Well, anyway, congratulations on your fine score. I got only 50%.
I forgot to send the link.
Excellent points! You convinced me. That said, I still want to know how to solve these problems. I'm not stupid, just dumb.
I hope the tutorials will be broader than what the test questions suggest... dealing with incomplete information and with different very small degrees of risk are also important skills.