Reptilian brain · Loss, Risk & Scarcity
Zero-Risk Bias
Preferring to eliminate one small risk completely over reducing a bigger risk substantially; certainty of zero feels better than a larger expected gain.
An everyday example
Paying for an extended warranty on a small appliance while remaining uninsured for the roof.
What it can cost you
Buying certainty where it is cheap to sell and ignoring the exposures that matter.
Warning signs
- I want it to be zero.
- I bought peace of mind on the wrong thing.
One thing to do
Rank your risks by expected loss; spend on the top of the list, not on whatever can be reduced to zero.
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