Risk Intelligence Quotient (RQ) and decision fatigue

The idea of a risk intelligence quotient was put forth by the behavioral scientist Dylan Evans. He postulated that everyone has a capacity for determining probability based on the ability to internalize and mull information gathered from various sources.

A quote from Dylan is:

‘Risk intelligence is not about solving probability puzzles; it is about how to make decisions when your knowledge is uncertain.’

An interesting thing that was discovered is that people with too little confidence, or too much confidence were equally likely to incorrectly surmise  probability.

Another finding was that people that had high values in other types of intelligence (such as IQ, academically, or through experience) did not necessarily have a high correlation in risk intelligence.

Here is a video of Dylan giving a talk about risk intelligence and different types of successful gamblers.

Risk intelligence is not a static value, it changes throughout the day based on how your mind is able to incorporate facts, internalize them and develop models. Many doctors, politicians and CEOs making very important decisions have a poor RQ. This is because of what is known as decision fatigue.

Decision fatigue is when you are making too many decisions to accurately predict the best outcome from a decision. It can also occur when there is not enough information presented to make a proper model. Here is a quote from an article about decision fatigue.

“Good decision making is not a trait of the person, in the sense that it’s always there,” Baumeister says. “It’s a state that fluctuates.” His studies show that people with the best self-control are the ones who structure their lives so as to conserve willpower. They don’t schedule endless back-to-back meetings. They avoid temptations like all-you-can-eat buffets, and they establish habits that eliminate the mental effort of making choices. Instead of deciding every morning whether or not to force themselves to exercise, they set up regular appointments to work out with a friend. Instead of counting on willpower to remain robust all day, they conserve it so that it’s available for emergencies and important decisions.”

Here is the link to the full article on decision fatigue.