Psychologists determine our “paranoia” or “risk aversion” by subjecting a person to a single experiment –then declare that humans are rationally challenged as there is an innate tendency to “overestimate” small probabilities. It is as if the person will never again take any personal tail risk! Recall that academics in social science are … dynamically challenged. Nobody could see the grandmother-obvious inconsistency of such behavior with our ingrained daily life logic. Smoking a single cigarette is extremely benign, so a cost-benefit analysis would deem one irrational to give up so much pleasure for so little risk! But it is the act of smoking that kills, with a certain number of pack per year, tens of thousand of cigarettes –in other words, repeated serial exposure.
Beyond, in real life, every single bit of risk you take adds up to reduce your life expectancy. If you climb mountains and ride a motorcycle and hang around the mob and fly your own small plane and drink absinthe, your life expectancy is considerably reduced although not a single action will have a meaningful effect. This idea of repetition makes paranoia about some low probability events perfectly rational. But we do not need to be overly paranoid about ourselves; we need to shift some of our worries about bigger things.
