The Paradox of Risk

The Paradox of Risk refers to the idea that people often behave more cautiously when a potential loss is small and less cautiously as the potential loss increases. In other words, individuals tend to take bigger risks to avoid small dangers but become more conservative when facing larger threats. This counterintuitive behavior can occur because small risks feel more immediate and manageable, while large risks seem distant or overwhelming, leading people to underestimate their true danger or to become complacent. Understanding this paradox helps explain why risk management can be challenging and why perceptions of danger don't always match real stakes.