It’s a Risky Life! Understanding the Math behind risk and decision-making Prof. David Rios

Humankind has always had to cope with the concept of risk and return, were it only to seek food and protect against predators and natural hazards. Modern society, while creating new opportunities, has also brought about additional and increasingly complex risks, such as Climate change, nuclear energy, financial crisis or terrorism, to name a few. To deal with such threats, which entail potentially catastrophic losses due to uncertainty, mathematicians have, throughout human history, developed a set mathematical concepts to help take the best possible decision.

The basic concepts behind the complex Math

Today’s highly complex field of risk management, a crucial component of many industries, may seem like a lot to handle for a non-academic audience. But don’t let words like Bayesian statistics, utility function or game theory scare you off. Behind these technical terms are some basic easy-to-grasp concepts, of which illustrative examples can be found in our everyday lives.

Want to know how drunk driving and breathalyzers help explain the Bayes rule? Or how football can help you grasp the concept of subjective probability? In just over two minutes each, the eight episodes of It’s a Risky Life will help you understand some of the most essential notions underlying risk: how to deal with uncertainty? How to interpret probabilities? How to evaluate the consequence of our decisions? How to design counter measures taking into account uncertainty and constraints? How to measure risk coming from intelligent adversaries?