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The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

Penned By Sam L. Savage
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The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty

Penned By Sam L. Savage
4.85 82,702 Ratings
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Editor's Note:
A must-read for anyone who makes business decisions that have a major financial impact. As the recent collapse on Wall Street shows, we are often ill-equipped to deal with uncertainty and risk. Yet every day we base our personal and business plans on uncertainties, whether they be next month’s sales, next year’s costs, or tomorrow’s stock price. In The Flaw of Averages , Sam Savage­known for his creative exposition of difficult subjects­ describes common avoidable mistakes in assessing risk in the face of uncertainty. Along the way, he shows why plans based on average assumptions are wrong, on average, in areas as diverse as healthcare, accounting, the War on Terror, and climate change. In his chapter on Sex and the Central Limit Theorem, he bravely grasps the literary third rail of gender differences. Instead of statistical jargon, Savage presents complex concepts in plain English. In addition, a tightly integrated web site contains numerous animations and simulations to further connect the seat of the reader’s intellect to the seat of their pants. The Flaw of Averages typically results when someone plugs a single number into a spreadsheet to represent an uncertain future quantity. Savage finishes the book with a discussion of the emerging field of Probability Management, which cures this problem though a new technology that can pack thousands of numbers into a single spreadsheet cell. Praise for The Flaw of Averages “Statistical uncertainties are pervasive in decisions we make every day in business, government, and our personal lives. Sam Savage’s lively and engaging book gives any interested reader the insight and the tools to deal effectively with those uncertainties. I highly recommend The Flaw of Averages .”— William J. Perry , Former U.S. Secretary of Defense “Enterprise analysis under uncertainty has long been an academic ideal. . . . In this profound and entertaining book, Professor Savage shows how to make all this practical, practicable, and comprehensible.”— ­Harry Markowitz , Nobel Laureate in Economics

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Length 416 Pages
Released January 1, 2009
Identifier (ISBN) 6351800
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Sam L. Savage
The Mind Behind the Work
Sam L. Savage

Sam L. Savage writes contemporary fiction and has always been fascinated by character-driven stories. They hold a degree in English Literature and previously worked as an editor before transitioning to writing their own books. Sam L. Savage lives with their spouse and a very vocal rescue cat.

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"I thoroughly enjoyed the elegance of it. A brilliant concept executed with flair. Just a few pacing choices I would change. A very distinguished novel."
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"Exceeded all my expectations. I adored how the story unfolded. It kept me captivated without sacrificing elegance. A true literary gem."
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"Exceeded all my expectations. The prose is exquisite. It’s accessible yet undeniably sophisticated. I am now a lifelong fan of this author."
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"I thoroughly enjoyed the elegance of it. It held my rapt attention, even when certain twists were telegraphed. A wonderful companion for a quiet weekend."
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"Absolutely brilliant. I became deeply invested in the protagonist's journey. A masterclass in storytelling. I am now a lifelong fan of this author."
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"Masterpiece from start to finish. It strikes a perfect harmony of dialogue and world-building. Every chapter felt necessary. An absolute must-read for connoisseurs of the genre."
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"Absolutely brilliant. The author orchestrated a breathtaking finale. Truly a work of art. I will undoubtedly revisit this masterpiece."
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"A profoundly satisfying read. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. A true literary gem."
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"Such a rich narrative. I became deeply invested in the protagonist's journey. A masterclass in storytelling. An absolute must-read for connoisseurs of the genre."
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"Took a moment to build, but the payoff was spectacular. The protagonist was compelling, though some subplots felt slightly overshadowed. A wonderful companion for a quiet weekend."
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"I find myself somewhat conflicted. It verged on repetitive in the second act. A more concise edit would have served it well. Perhaps more aligned with a different audience's tastes."
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"Exceeded all my expectations. I adored how the story unfolded. It kept me captivated without sacrificing elegance. An absolute must-read for connoisseurs of the genre."
Linda Miller
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"A profoundly satisfying read. The author orchestrated a breathtaking finale. Truly a work of art. I will undoubtedly revisit this masterpiece."
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"A profoundly satisfying read. The prose is exquisite. It’s accessible yet undeniably sophisticated. I will undoubtedly revisit this masterpiece."
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Ashley Anderson May 03, 2024
"A very strong entry. Beautiful writing, though I craved slightly more depth in the lore. Still, undeniably engaging. A very distinguished novel."
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"Exceeded all my expectations. The prose is exquisite. It’s accessible yet undeniably sophisticated. An absolute must-read for connoisseurs of the genre."
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"I thoroughly enjoyed the elegance of it. The middle had a deliberate pace, but the climax was phenomenal. A wonderful companion for a quiet weekend."
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"I thoroughly enjoyed the elegance of it. It held my rapt attention, even when certain twists were telegraphed. A wonderful companion for a quiet weekend."
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"I was completely blown away. I became deeply invested in the protagonist's journey. A masterclass in storytelling. An absolute must-read for connoisseurs of the genre."
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"Absolutely brilliant. I adored how the story unfolded. It kept me captivated without sacrificing elegance. I am now a lifelong fan of this author."
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"A profoundly satisfying read. The pacing was impeccable and the characters felt incredibly authentic. I was completely immersed. An absolute must-read for connoisseurs of the genre."
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"Honestly one of the most premium reading experiences lately. I became deeply invested in the protagonist's journey. A masterclass in storytelling. A true literary gem."
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