We don't evaluate and judge risks very well. In fact, we often times tend to overestimate our chances of winning contests while underestimating the chance of something bad happening. The Wall Street Journal suggests that we can train our brain to track skills like a gambler.
The first step to compensating poor risk assessment abilities is to recognize the tendency to be overconfident and under-confident with most estimates.
[W]e could estimate the likelihood of various events in a given week, record our estimates in numerical terms, review them the next week and thus measure our risk intelligence in everyday life. A similar technique is used by many successful gamblers: They keep accurate and detailed records of their earnings and their losses and regularly review their strategies in order to learn from their mistakes.
So first start the week with a list of estimates that will happen that week, which means ranging from weather to world events, and at the end of the week take a look at how often you were right. As you go over your data you'll be able to review your logic and improve on it.
You won't be able to get an estimate on every probability, but practice will make you better at judging risks.
[Wall Street Journal]
Photo by Adrian Sampson.
