Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2010
  • Article
  • California Management Review

Fretting About Modest Risks Is a Mistake

By: Matthew Rabin and Max Bazerman
  • Format:Print
ShareBar

Abstract

Managers often engage in risk-averse behavior, and economists, decision analysts, and managers treat risk aversion as a preference. In many cases, acting in a risk-averse manner is a mistake, but managers can correct this mistake with greater reflection. This article provides guidance on how individuals and organizations can move toward greater reflection and a more profitable aggregate portfolio of decisions. Inconsistency in risk preferences across decisions is a costly mistake for both individuals and for organizations.

Keywords

Decision Biases; Risk Management; Risk and Uncertainty; Decision Making

Citation

Rabin, Matthew, and Max Bazerman. "Fretting About Modest Risks Is a Mistake." California Management Review 61, no. 3 (May 2019): 34–48.
  • Find it at Harvard
  • Read Now

About The Authors

Matthew Rabin

Negotiation, Organizations & Markets
→More Publications

Max H. Bazerman

Negotiation, Organizations & Markets
→More Publications

More from the Authors

    • Spring 2025
    • Journal of Law, Medicine & Ethics

    An Insider’s Perspective on How to Reduce Fraud in the Social Sciences

    By: Max Bazerman
    • February 2025
    • Faculty Research

    Slice Labs: Creating a Fraud-Free Online Insurance Platform

    By: Amit Goldenberg, Max Bazerman and Ruth Page
    • February 2025
    • Faculty Research

    Slice Labs: Creating a Fraud-Free Online Insurance Platform (B)

    By: Amit Goldenberg, Max Bazerman and Ruth Page
More from the Authors
  • An Insider’s Perspective on How to Reduce Fraud in the Social Sciences By: Max Bazerman
  • Slice Labs: Creating a Fraud-Free Online Insurance Platform By: Amit Goldenberg, Max Bazerman and Ruth Page
  • Slice Labs: Creating a Fraud-Free Online Insurance Platform (B) By: Amit Goldenberg, Max Bazerman and Ruth Page
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.