Nearly everyone has been in a situation that required us to form a hypothesis or draw a conclusion to make a decision with limited information. This kind of decision-making crops up in all aspects of life, from personal relationships to business. However, there is one cognitive trap that we can easily fall into from time to time. We tend to overcomplicate reasoning when it’s not necessary.
Read MoreI’ve noticed something unusual lately. There seems to be an increase in the number of events people are declaring Black Swans and the ensuing philosophic tug-of-war of detractors saying they’re wrong. At first, I thought people were just going for clickbait headlines, but I now feel something else is going on. We are experiencing a sort of collective risk blindness: we’re unable or unwilling to see emerging risk in front of us.
Read MoreA well-studied phenomenon is that perceptions of probability vary greatly between people. You and I perceive the statement “high risk of an earthquake” quite differently. There are so many factors that influence this disconnect: one’s risk tolerance, events that happened earlier that day, cultural and language considerations, background, education, and much more. Words sometimes mean a lot, and other times, convey nothing at all. This is the struggle of any risk analyst when they communicate probabilities, forecasts, or analysis results.
Read MoreThere’s a special kind of history re-writing going on right now among some financial analysts, risk managers, C-level leadership, politicians and anyone else responsible for forecasting and preparing for major business, societal and economic disruptions. We’re about 3 months into the COVID-19 outbreak and people are starting to declare this a “Black Swan” event. Not only is “Black Swan” a generally bad and misused metaphor, but the current pandemic also doesn’t fit the definition. I think it’s a case of CYA.
Read MoreReaders of Hubbard’s How to Measure Anything series or Jones and Freund’s Measuring and Managing Risk: A FAIR Approach are familiar with the Equivalent Bet Test. The Equivalent Bet Test is a mental aid that helps experts give better estimates in a variety of applications, including risk analysis. It’s just one of several tools in a risk analyst’s toolbox to ensure subject matter experts are controlling for the overconfidence effect.
Read MoreOut of all the ways to lie with statistics and manipulate peoples’ perceptions, the semi-attached figure may be the most prevalent. It’s hard to spot unless you are really looking for it because it’s sneaky, subtle and takes a fair bit of concentrative analysis to identify. A semi-attached figure occurs when proof is given for a claim, but when the reader looks at it closely, the proof and the claim are not related. It’s called “semi-attached” because the proof seemsto support a claim, but upon inspection, it doesn't. Marketing and advertising professionals are absolute masters of the semi-attached figure.
Read MoreThe framing effect is used in many places, intentionally and unintentionally, but is most present in advertising. It's a very effective way to frame perceptions.
Read MoreMy New Year’s Day ritual has been the same for nearly 10 years now: a late breakfast, a cup of strong coffee and a scan of security blogs and news for two things that always make me chuckle: cyber predictions for the new year, and a retrospective that declares the past year the “Year of the Data Breach.” Kelly Shortridge perfectly parodied the former and I actually thought we might go a year without the latter, until I found this headline on Bloomberg news in which 2017 is named the Year of the Data Breach.
Read MoreWould you be surprised to find that “nearly 40% of ransomware victims pay attackers,” according to a recent article published by DarkReading? I sure was. The number of victims that pay ransomware and the amount paid has been an elusive figure for years now. To date, law enforcement has not collected and published ransomware crime statistics like they have for other forms of criminal activity.
Read MoreSelection bias is what makes these surveys virtually worthless. I previously wrote about the problems of surveys in information security vendor reports and I want to dig in deeper on a topic from the last post: properly selecting a representative sample from the general population being surveyed. This matters so much. This is perhaps the most important step when conducting a statistically sound survey.
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