Five Things You Should Know About Risk

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Illustration by Brett Ryder

The latest issue of Stanford Business magazine looks at the theme of risk from a variety of angles. Here are five key takeaways from a selection of the stories.

How Can You Tell if Your Boss is Honest?

Trustworthy leaders project confidence, share the credit, take the blame, acknowledge problems quickly, establish clear roles, and show that trust is an important company value.

— Roderick Kramer

Practice Can Reduce the Risks of Entrepreneurship

Persistent entrepreneurs who try again after a failed business increase their odds of success, adding to their business longevity with each new venture.

— Kathryn Shaw

We Underestimate Danger

Research showing that people’s perceptions of danger and benefits are distorted in certain situations has implications for health policy makers. A long list of side effects, for example, can cause consumers to underestimate the risks of taking a medication.

— Uzma Khan

What Constitutes a Financial Bubble?

My preferred definition is one where investors buy an asset not for its fundamental value, but because they plan to resell, at a higher price, to the next investor.

— Peter Koudijs

Exploring the Likelihood of a Space Catastrophe

We developed a system of mathematical equations that is capable of predicting collisions for thousands of years into the future. Our model suggests that the greatest risk occurs in about 1,500 years.

— Lawrence Wein