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It is a good idea to be prepared. It is even a good idea to
be prepared for some things that are not very likely to happen (depending on
the severity of the consequences). There are mathematically precise formulas
for determining rational risks when playing games of chance. Believe it or
not, these same formulas (based on laws of probability) can be applied to
risks in daily life. Indeed, that is just how insurance companies operate.
How much should you spend to be prepared for a flood? How much for a fire?
The answer depends upon two factors: (1) what are the chances that the
disaster might occur, and (2) how much would you lose if it did?
Unfortunately, in most cases we can only estimate both probabilities and
costs, but this often doesn't matter. We can make instinctive guesses, and
our instincts are usually not far off base. Probabilities are not exact
numbers in any case. The object is to be close enough. The fallacy of
Appeal to Fear imitates rational risk analysis, but exploits natural fear,
and the inherent inaccuracy of guessing, to inflate our estimate of the
costs and/or our estimate of the risks. By getting disasters to seem more
likely to occur, or making them seem more devastating if they do occur, the
fallacy tries to get us to spend more on preparing for a disaster than is
genuinely rational. |