The Edge: The Art of Risking Everything

Tyler Cowen: Now, there's plenty of material in your book about people who take a lot of risk. The subtitle is The Art of Risking Everything. How much do you think people segregate areas of risk-taking? For instance, people might say, "Well, Tyler, you travel to some dangerous locations." But I'm totally afraid to scuba dive. I feel I'm very strongly segregated. I either take a fair amount of risk or close to none at all. Is that your model of most humans?

Nate Silver: That's pretty normal. Yes. The example I think I use in the book is Ezekiel Emanuel, telling people you shouldn't go to restaurants because we still have some COVIDs like now, in 2022, 2023, right? But he rides a motorcycle, which is known to be one of the most dangerous things per mile that you can do. People are usually not super meta-rational about risk.

Tyler Cowen: But should they be? Should you have one general risk attitude? Is that more meta-rational?

Nate Silver: Look, I think things that seem irrational are often rational on a higher plane, right?

Tyler Cowen: Sure. Yes.

Nate Silver: Like loss aversion. I had a pair of headphones stolen from me the other day, and I felt very guilty about that. We hadn't locked the door of our car, and it was my fault.

Tyler Cowen: This is in New York?

Nate Silver: Actually, in upstate New York. You've got to be careful in upstate.

Tyler Cowen: Real home of thieves. Sure.

Nate Silver: You're like, "Oh, okay. I can afford a new pair of headphones. It's not that big a deal." If you were chronically sloppy about things like that, then that would cause more hardship and would be wasteful, and so, loss aversion, things like that — they come from flawed iterations of rationality that might serve a higher purpose or might have served an evolutionary purpose earlier in human civilization.