By Baruch Fischhoff and John Kadvany
Oxford University Press
Hardback: £7.99
Amazing. A book that should be read by everyone who is still thinking of investing in hedge funds or believing that the stock market is rational. The subject is well explained, covering risk types that we are all familiar with, as well as some that most of us probably never think of as risk. What I especially like is the large number of recent events that are discussed, deep into the year 2011.
The range of human activity covered is vast, and for many areas it is not so much risk as decision making that is discussed. There are many short sentences that were perfectly clear to me but still unexpected such as “people are [deemed] adequately informed when knowing more would not affect their choices”.
The language is clear and pleasant to read, though here and there I sensed that the authors struggled to remain within the “very short” framework. That also means that you should not expect to pick up the 162-page book after dinner and finish it before going to bed. Much of it invites reflection and slow savouring of the ideas, effects and correlations that make risks and deciding about them so intimately intertwined with our human psyche.
A very pleasant book indeed.
