An Economist Walks Into A Brothel

Is it worth swimming in shark-infested waters to surf a 50-foot career-record wave? Is it riskier to make an action movie or a horror movie? Should sex workers forfeit 50 percent of their income for added security or take a chance and keep the extra money? Most people wouldnt expect an economist to have an answer to these questions - or to other questions of daily life such as who to date or how early to leave for the airport. But those people havent met Allison Schrager an economist and award-winning journalist who has spent her career examining how people manage risk in their lives and careers. Whether we realise it or not we all take risks large and small every day. Even the most cautious among us cannot opt out - the question is always which risks to take not whether to take them at all. What most of us dont know is how to measure those risks and maximise the chances of getting what we want out of life. In An Economist Walks into a Brothel Schrager equips readers with five principles for dealing with risk principles used by some of the worlds most interesting risk takers. For instance she interviews a professional poker player about how to stay rational when the stakes are high a paparazzo in Manhattan about how to spot different kinds of risk horse breeders in Kentucky about how to diversify risk and minimise losses and a war general who led troops in Iraq about how to prepare for what we dont see coming. When you start to look at risky decisions through Schragers new framework you can increase the upside to any situation and better mitigate the downsides.