Zero Risk Bias

I ran into a concept today called zero risk bias and I realized that this is something that holds so many people back.

The Decision Lab describes zero risk bias as the following:

Zero risk bias relates to our preference for absolute certainty. We tend to opt for situations where we can completely eliminate risk, seeking solace in the figure of 0%, over alternatives that may actually offer greater risk reduction.

In short, this bias leads people to optimize for “certainty” over an optimal choice.

Convertize gives the example:

… people will most often choose the elimination of risk over a greater decrease. For example, when asked whether they would prefer the option that decreased risks from 5 to 0% or from 50 to 25%, people overwhelmingly chose the former despite the fact that the decrease in risk is nowhere near as significant.

This bias shows up often in public policies, investing, and even our daily lives (the “money back guarantee” is an everyday example of this bias being used to get you to buy something you normally would not or the fact that people bought out toilet tissue at the start of the pandemic).

To overcome this bias, we have to think of managing risks versus eliminating them. You will always have to deal with some level of risk to achieve anything worthwhile so start to optimize for the least amount of risk that gives you the greatest upside.

If you want to dive deeper into the topic, you can read more here from The Decision Lab.