An Economist Walks into a Brothel, And Other Unexpected Places to Understand Risk

**_*Is it worth swimming in shark-infested waters to surf a 50-foot, career-

record wave?_ *

****

** Is it riskier to make an action movie or a horror movie? **

**_*

_ *Should sex workers forfeit 50 percent of their income for added security or

take a chance and keep the extra money?** **

Most people wouldn't expect an economist to have an answer to these questions

\--or to other questions of daily life, such as who to date or how early to

leave for the airport. But those people haven't met Allison Schrager, an

economist and award-winning journalist who has spent her career examining how

people manage risk in their lives and careers.

Whether we realize it or not, we all take risks large and small every day.

Even the most cautious among us cannot opt out--the question is always which

risks to take, not whether to take them at all. What most of us don't know is

how to measure those risks and maximize the chances of getting what we want

out of life.

In _An Economist Walks into a Brothel,_ Schrager equips readers with five

principles for dealing with risk, principles used by some of the world's most

interesting risk takers. For instance, she interviews a professional poker

player about how to stay rational when the stakes are high, a paparazzo in

Manhattan about how to spot different kinds of risk, horse breeders in

Kentucky about how to diversify risk and minimize losses, and a war general

who led troops in Iraq about how to prepare for what we don't see coming.

When you start to look at risky decisions through Schrager's new framework,

you can increase the upside to any situation and better mitigate the

downsides.