Risk assessment: Keep it simple

Source: INSEAD Knowledge

“The ability to assess risk and uncertainty is critical for investment banks and businesses. While some may advocate the use of complex models, INSEAD Dean of Faculty and Professor of Decision Sciences, Anil Gaba, believes that if you’re looking to forecast risk, you’d do well to keep it simple.

He’s on a search for convenient rules of thumb – or what he calls ‘frugal parsimonious heuristics’—to help managers and investors make better decisions more easily. There’s been enormous theoretical progress in the past fifty or sixty years in understanding how people should make decisions in business, politics and economics. Read more >