Henry Pomerance

4/21/20

Senior Project 2020

Business and Marketing

Blog Post #4

As I was reading my book on the history of risk, I came across a quote that, though simple, highlights an important part of risk in all facets: “The history of risk management is written in red as well as in black.” The author Peter Bernstein is specifically referring to 17th century gambler Chevalier de Méré’s slight miscalculation during betting, which, though his probability was off by only a percentage point, was the difference between him being rich or poor. Despite humans’ best efforts to understand, prepare for, and control risk, it is always much harder than we think (even now, in more complex environments than betting). The numerous botched experiments in risk management are prime examples of this, but everyday people encounter the same problems on a daily basis.