Valuing Risk:Part 3

Knock on Wood 

It's like thunder, lightning

The way you love me is frightening

You better knock, knock on wood 

The Risk of dying by being stuck by lighting is made of its Likelihood AND its Consequences

I didn’t expect to revisit the issue of risk again but a recent article by Dan Reed in Forbes https://www.forbes.com/sites/danielreed/2020/07/30/if-covid-19-really-isnt-a-big-threat-to-the-average-airline-passenger-but-no-airline-bothers-to-tell-the-story-does-it-make-any-noise/#66cb955427f6 made me reconsider this.  In the article, it appears that likelihood is being confused with risk.  Risk is the product of likelihood AND consequences, not only likelihood.  For example, the likelihood of being struck by lightning may be very low, but the consequences of being struck by lightning might be very dire.

For example the likelihood of being stuck by lightning is said to be 0.0002% or 1 in 500,000, and the likelihood of dying after being stuck by lighting is close to 100%.  The risk of dying by being struck by lightning thus is also 0.0002%.  The likelihood of contracting COVID-19 on an airplane has been given as  0.013% and there is a 5% chance of dying from COVID -19 after contracting it.  Thus the risk of dying from COVID after flying is 0.00065%.  The risk can be mitigated by altering the likelihood OR the consequences.  The likelihood of being struck by lightning if you seek shelter is 0%. Thus the risk of dying from lightning if you seek shelter during a thunder and lightning storm is 0%.  The likelihood of contracting COVID-19,  if you don’t fly is 0% and thus the risk of dying from COVID-19 after flying, if you don’t fly, is also 0%.  Of course you could also address the CONSEQUENCE of dying from COVID-19 by making sure that you have ICU beds and ventilators available.  Or you could also lower the LIKELIHOOD of contracting COVID-19 by social distancing and only visiting places that require the wearing of masks.

The likelihood of contracting COVID-19 after flying is 76 times less than being struck by lightning.  However the risk of dying after contracting COVID-19 after flying is only 3.8 times less than the risk of dying after being struck by lightning.  If we mitigate the risk of dying from lightning by seeking shelter, then not flying is also a reasonable response.

The likelihood of getting soaking wet if you are unprotected in a rainstorm is 100%.  The consequences of being uncomfortable until you are dry is  100%.  The consequence of dying from being soaked after being in a rainstorm is close to zero.  Thus I was personally reasonable , or so I say, to attend a college homecoming football game 50 years ago in hopes of seeing my team win, because the risk of harm was low, even if the likelihood of getting wet was high.  By the way, my college team lost that game anyway 😒

Bankruptcy

Hotel California

You can check out any time you like

But you can never leave!

Bankruptcy is the ultimate checking out of a game.  But some games don’t let you leave!

Wealthy individuals and corporations hate paying for insurance,  and may self insure because  they assume that they can pay any costs that insurance might have paid out.  However they object only to the costs.  Rewards such as stock markets gains (stock markets formed as a way to insure the liquidity of investments) are popular, as are corporate bailouts.   So clearly the objection is financial not one of  principle.  As a last resort, if the consequences become too dire, some think that they can always declare bankruptcy.  Bankruptcy is the ultimate walking away from a game.  But you can't walk away from some games.  The third law of thermodynamics is sometimes facetious stated as "you can't get out of the game".   A more formal statement is "It is impossible by any procedure, no matter how idealized, to reduce the temperature of any closed system to zero temperature in a finite number of finite operations."

This may explain why the wealthy are against Social Security insurance, oppose health insurance, and gutted the stockpiles needed to insure against a rare occurrence like COVID-19. They assumed that they could always declare bankruptcy, that is take the ball and go home. But bankruptcy requires that there are creditors and they pay your costs. If there is no one to pay those costs, then you can’t declare bankruptcy, get out of the game. Societies can not get out of the game, can not declare bankruptcy, and still remain as viable societies.

In Defense of Science

The Emperor’s New Clothes

"A vain emperor hires two swindlers who promise to make him the finest suit of clothes made from fabric invisible to anyone who is "hopelessly stupid”. 

He marches in procession in those new clothes. The townsfolk play along with the pretense. 

Then a child in the crowd cries out that the Emperor is wearing nothing at all.
The cry is taken up by others. The Emperor cringes but holds his head high and continues the procession."

 

Right now we need that child to defend science.

Science is under attack. From the science of climate change, to evolution, to vaccination, to COVID‑19, etc., the attacks have become more vicious and more frequent.  The White House recently said "Science should not get in the way schools reopening” even though science is only offering an opinion as to what is safe.

Some of the more common lines of attack ( and their refutations) are:

It’s only a theory

This confuses the term theory in common language with theory as used in science.  A validated theory makes predictions.  The Theory of Relativity is credited to Einstein.  It makes predictions and those predictions continue to be tested.  The atomic bomb and the energy from the sum are both consequences of the theory of relativity.  A theory is more than just an opinion.  Science considers every theory, model, wrong, but some theories are useful.

It’s a fact.

Just because people say something doesn’t make it a fact. A fact is something that can be observed. If it can't be observed, as far as science is concerned there is no fact.  And to paraphrase the late Senator Daniel Patrick Moynihan, while people are entitled to their own opinions, they are not entitled to their own facts. You have to acknowledge all of the facts, not just the ones that you like. Science does not deal with alternate facts.

I have a right to my own opinion.

You certainly have a right to your own opinions.  But when you exercise that opinion, as when swinging your arm, your rights end where my nose begins, e.g those rights infringe on someone else’s rights. For example you have every right to contract the corona virus. However when you wear a mask you are preventing me from contracting your corona virus.

The Enemy of My Enemy Is NOT My Friend

You've Got A Friend In Me

When the road looks rough ahead 
And you're miles and miles from your nice warm bed
You just remember what your old pal said
Yeah you've got a friend in me

Having friends is nice.  But the enemy of my enemy is NOT  necessarily my friend.

The old saying, “The enemy of my enemy is my friend” is demonstrably  wrong.  This matters, because in the current election campaign, we are being asked to view a candidate’s opponent as an enemy.  That does not mean that the first candidate is therefore my friend.  This sounds good but can be completely disproven by mathematics. 

If a is me, b is one candidate, and c is the opponent of the first candidate, then  if <> is being an enemy and = is being a friend, then

a<>c and b<> c does not mean that a=b. 

As a non mathematical example, Stalin and Churchill shared a common enemy in Adolf Hitler during WWII.  But Churchill never thought that this made Stalin his friend.  You can make common cause with an enemy, but that does not make that enemy into your friend.  It is better to convince me that you are my friend, than to try to convince me that your opponent is my enemy.

Valuing Risk: Part 2

Let's Face the Music and Dance

Before they ask us to pay the bill     
And while we still have the chance 
Let's face the music and dance

The size of the bill, the consequences, will depend on how we view risk.

It is convenient to think of risk as the combination of likelihood  and consequences.  The recent reopening of Disney Springs and Disney World have provided a perfect example of how consequences affect the perception of risk, and how that risk affects our behavior.

During the COVID-19 crisis face masks are being required at both Disney Springs, the Disney World shopping district in Florida, and the Disney World Theme Parks.  Masks are required for entry to both the theme parks and the shopping district.  There is a difference between how long masks are worn after entry though.  Masks are being removed by some visitors to Disney Springs, but masks are not being removed by visitors to the Disney Theme parks.  The likelihood of contracting the corona virus is equal in both places.  If behavior is different, then visitors to both places must be calculating risk differently. 

The consequences of not continuing to wear a mask on the Disney Springs property is removal from the shopping district, but there was no cost for entry to this shopping district.  The consequence of not continuing to wear a mask at a Disney theme park is removal from the theme park, but there was an entrance fee of almost a hundred dollars to the theme parks.  Since the consequences are different, $0 and almost  $100, even though they have the same likelihood, they have a different risk.  The risk of not wearing a mask at a Disney Theme park is greater than the risk of not wearing a mask at the Disney shopping district.  Thus is it not surprising that continued mask wearing is greater at the theme parks than at the shopping district.  

Valuing Risk

Love and Marriage

Love and marriage, Love and marriage

Goes together like a horse and carriage

Something things just go together.  Risks can’t be understood unless you understand both likelihood AND  consequences.

Understanding and properly valuing risks has become very important during the corona virus crisis.  We are being asked to properly quantify risks.  Part of the reason is that people don’t understand both components of risk and part is because people are approaching risk from a framework that can best be understood by viewing a previous blog post. https://dbeagan.blogspot.com/2020/06/a-framework-for-human-behavior.html.

Risk is based on the likelihood of an event occurring and the consequences if that event does occur.  The response to COVID-19, the disease caused by the corona virus, include measures to reduce the likelihood and to minimize the consequences.  The likelihood of catching the corona virus is lower if the chances for contracting it are lowered. That is why people are urge to wear masks and social distancing have been promoted, because they lower the likelihood of contracting the corona virus.

The other component of risk are also best understood by actions taken during the pandemic.  The ultimate consequence is that one could die from COVID-19.  That consequence is lowered if ventilators and Intensive Care Unit beds are available at hospitals treating those with COVID‑19.

However both the likelihood and the consequences are not the same for those with a user optimal or a system optimal framework.  Those with a user optimal perspective (“what’s in it for me”) can agree that they lower their likelihood by visiting places where others socially distance and wear masks.  They do not lower their own likelihood appreciably by wearing masks themselves.  Those with a system optimal outlook ( “I do this not for myself, but for others”) wear masks to protect others, not because it lowers their own likelihood of contracting the coronavirus. Even if both user and system optimalists agree on the likelihood  of contracting the coronavirus if they social distance and visit only paces wear other wear masks,  they may not agree on the value of the reduction in  likelihood of their own wearing of a mask.

Similarly consequences are viewed differently by those with a user or system optimizing perspective.  Those with a user optimal perspective only value actions that reflect consequences to themselves.  Acquiring ICU Beds or Ventilators that they will not use will have no value to them.  Those with a system optimal perspective place value if anyone in the system uses them.

The inclusion of others in the system also takes on a perspective in likelihood and consequence.  There is no value in reducing the likelihood for members not included in one's definition of a system.  Similarly there is no value in lowering the consequences of those not included in one’s definition of a system.

Even when individuals properly value likelihood and consequences, which means they properly value the risk, they may arrive at completely different values for the risk depending on their own framework.  Just because likelihood and consequences  go together like a horse and carriage when valuing risk, individuals can arrive at different assessments of risk depending on their framework.