Risk Compensation
When Avoiding Danger Increases Risk
Welcome to Polymathic Being, a place to explore counterintuitive insights across multiple domains. These essays take common topics and investigate them from different perspectives and disciplines to come up with unique insights and solutions.
Today's topic is one I’ve been wanting to write for a while about how the human perception of risk often puts us at even greater danger because we don’t apply the right systems thinking perspectives to contextualize it properly. We’re going to investigate the topic of risk compensation and provide some useful tips for analyzing risk better.
Intro
Risk Compensation is the theory that people change their behavior in response to perceived risk levels. That seems pretty obvious on a first pass. What’s also obvious is that people tend to be more cautious when they perceive danger, but less careful when they feel more protected.
But why would we need to be more cautious when we are protected?
This is where the counterintuitive aspect comes in with an idea called Risk Homoestasis which basically means we elevate our actions to a degree that maintains a consistent level of risk. For example:
Seatbelts, meant to protect from injury during crashes, resulted in higher speed crashes and riskier driving.
Antilock brakes resulted in cars traveling closer together and increased accidents.
All wheel drive vehicles drive faster in the snow because they can but they can’t stop any faster.
As American Football safety gear has improved, the players tackle harder and harder which increases the risk of brain injury requiring new protective technologies that further increase the impacts.
In short, the perception of safety causes us to act in ways that increase the underlying risk. While homeostasis might not be a problem per se, what happens more often than not is that we don’t actually get the benefits we anticipated and instead just dramatically increase the risk.
This is the quandary we explored earlier in Masks Do Work where, during the COVID pandemic, people put on cloth masks, felt like they were protected, and went all over town running errands dramatically increasing their actual risk.
Increasing Risk Reduces Danger
Flip that around and you’ve got the counterintuitive insight that the perception of danger causes us to moderate our behavior in ways that can actually reduce the risk. For example, in rock climbing, when attached to a rope, a climber may try a riskier move on the assumption that the rope will catch them.
The challenge is that, while the rope does catch them, they can still swing and hit other things and this is where most of the serious injuries occur. Conversely, with free climbing, moves are much more deliberate. You can’t afford to make a mistake because there is no rope.
Now that’s a pretty extreme example of risk so let’s look at one that’s a little more down to earth. When we were living in Florida there was a nice live oak in the front yard that was perfect for a little tree fort. The challenge was how to keep little kids from falling off of it.
The solution wasn’t railings, ladders, or any of that. Instead, I took a fence panel, reinforced it slightly, and strapped it in (I didn’t want to use nails or screws on the tree since we were just renting the place.) The edges flexed if you stood on them and it looked sketchy.
But you know what? The kids didn’t roughhouse up there, they didn’t push, run, jump, or swing all over. When they got close to the edge, they’d drop down and sit. They were super careful because the perception of danger was much greater. Had I put railings on I’m sure they would have been hanging and flipping over them. Instead, we didn’t even have a close call. The increased perception of danger resulted in safer behaviors than little kids would otherwise do.
It’s similar to when manufacturing facilities eliminated almost all risks of minor injuries. This had a conequence of increasing serious injuries like amputations and death. When workers became numb to the little risks, they also became numb to the bigger ones. Another example is one we poked at in The Enemy’s Gate is Down regarding hand grenades in the Army.
Summary
Risk Compensation is just the technical term for feeling safer and so, taking a few extra risks. The challenge is that it often backfires, causing the very issues you wanted to avoid. Sometimes stripping off safety features and being exposed to the risk of minor consequences of smaller risks improves safety overall.
The practical approach is to step back and ensure you are considering the broader implications. What would kids do if that tree fort had railings? Would it actually have been safer or would it have just looked safer? There aren’t a lot of easy answers here because it is counterintuitive.
For now, I’d just like to hear your stories of when you discovered your own risk compensation and what you learned from it. Please leave a comment below, join the subscriber chat, or repost this to Substack Notes / social media with your insights!
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Nice. The topic of financial risk comes to mind. At an individual level, having an overdraft or HELOC or similar probably increases a person’s financial risk tolerance in a way that still keeps them close to red line, but moves the goal posts. Eg if they have no access to credit, $0 is the baseline, whereas if they have $1,000 credit line, -$1,000 becomes their new zero.
Then at a larger scale, if a whole financial institution were able to rely on a government bailout in the event of risk back-firing, well…
“All wheel drive vehicles drive faster in the snow because they can but can’t stop faster.”
This reminded me of a conversation with a friend who had an all-wheel-drive SUV several years back. I used to live in Cleveland, and we were in the office during a major snowstorm. While heading home, I told him to drive carefully since the roads were not clean. He said he had an SUV, and I said nothing is 100% safe. I was driving slowly, and after a few miles, I saw an SUV on the other side of the road. It was a state highway with a 50 mph speed limit, and I thought this vehicle looked familiar, so I stopped and saw my friend in the SUV. I asked him what happened, and he said his SUV skid. Lucky for him, no one was driving in the other direction; otherwise, it would have been a head-on collision with a vehicle. So, it taught everyone that nothing is 100% safe.
On the other hand, I sometimes think we are trying to make the world/environment too safe for our kids, and we do not want them to fail or make mistakes, which will probably make them less resilient in handling life’s difficult situations. I am not saying we should not guide them or secure things, but I think we do more than we should, and I include myself in that category.