Don’t be too Risk Averse

This is a repost of my most recent article on the American Mathematical Society’s Graduate Student Blog

Graduate students are notoriously frugal. Although this is sometimes an economic necessity, in some ways I think we are a little too frugal. One of the ways that this frugality manifests, and that I find most prevalent, is risk aversion. This can be hard to detect because we are an adventuresome bunch. Although, perhaps more button-downed than the general college lot, we will try new foods, learn new languages and travel to new spots. However, in things that matter to our subject of interest, we tend to show our conservative side. I believe we ought to be more interested in doing unconventional things like entering contests, starting blogs, writing articles, making friends in other departments or collaborating with friends in other departments.

In matters institutional, social or organizational, we are trained to get creative as a last resort, rather than a first resort. While there is nothing wrong with wanting to pursue approaches that have a high probability of success, I believe that, paradoxically, success is not synonymous with the avoidance of failure. If exploitation is defined as the act of profiting from a known strategy with a known amount of benefit; and exploration is the act of searching for avenues of improvement; then, there is often a trade-off between exploitation and exploration. If we curtail our explorations, we risk missing out on better ways of doing things. If we spend too much time exploring, we risk not accruing much benefit from the knowledge we’ve gathered.

One complicating factor is the cost of experimentation. I make a distinction between expensive and cheap environments. In a cheap environment, one should be a lot more free to try something new. For instance, trying out a new pen or listening to a talk for an hour. In an expensive environment, you might be more reluctant to buy an unfamiliar brand of computer, that you have doubts about, on the off-chance that you might actually turn out to like it.

Rather than having a policy of saying no to unlikely ventures, I try to say no with a large probability and yes with a small probability. That is to say, every now and again, I try something that I don’t expect will work. I avoid doing this with very expensive decisions. However, in a cheap environment, I feel it’s important to try something unlikely every now and then. We make thousands of decisions a day. It’s actually quite easy to find one thing and do in the complete opposite way to the way that you normally do it.

I am even more intrigued by those things that work for others, but never seem to work for me. I am not a fan of broccoli. However, many people are. So every now and then, I try broccoli just in case I was wrong. I still don’t like it, but at least I end up eating more vegetables. In work, I sometimes try to emulate the approach of people who work in a completely opposite way to myself. I often learn a lot of new things things way. Of course, I am most comfortable doing things they way I have trained myself to do things and I get most of my work done that way.

Bring things full circle to where we started with frugality, I find that in academia, we are sometimes let concerns about cost override more important questions like whether the purchase is worth it. We send a lot of time doing things for ourselves. In our minds, it seems like we are saving money. However, the loss in productivity of doing things at which we are unskilled can outweigh the benefits of not spending a few extra dollars.

One way of figuring out if doing something yourself is not necessarily worth it is to consider whether you would find it tempting to do the same task if a friend offered to pay you the going-rate to do it. The famous example is a man who won’t pay someone else to cut his lawn for $5 and so cuts it himself, although he wouldn’t, all things being equal, cut his neighbour’s lawn for $5. In one case, he is saying lawn care is worth $5 and in the other case he’s saying it’s not. So, this is a trick I try often – looking at a cost from the other side of things, to see if I’m being too conservative.

I consider myself a work-in-progress. My sense is that I really ought to take on more risk than I do. I think the rewards to be gained from being more open to new opportunities can be worth it. Besides, it makes things less boring.

Are there some ways in which you consider yourself too risk averse?

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