Alison Shcraeger: The Economics of Risk and What a Las Vegas Brothel Taught Me About Uncertainty

The Unmistakable Creative Podcast

Srinivas Rao

Society & Culture

4.8 • 1K Ratings

🗓️ 31 October 2025

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Alison Shcraeger, economist and author of An Economist Walks Into a Brothel, explains how risk really works and why most people misunderstand it. From studying sex workers in Nevada to analyzing probability theory, Alison reveals that humans are not naturally wired to process probabilities—but we can learn. She introduces the concept of natural frequencies over percentages, showing how translating 55 percent into 55 out of 100 helps people make better decisions. This conversation explores why probability theory should be taught like reading, how emotion distorts risk assessment, why the past is a flawed predictor of the future, and what economists can learn from industries society prefers to ignore.

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Transcript

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0:00.0	As you probably notice, this month, we're bringing you our Life of Purpose series and revisiting
0:04.6	some of our most transformative episodes. Tune in to explore expert insights and practical
0:09.4	strategies on help, performance, and community well-being, all aimed at helping you achieve
0:14.4	personal and professional fulfillment. If you sign up for the newsletter, you'll not only get
0:18.5	recaps of the key ideas in each interview, but at the end of the series, you'll receive our free life of purpose ebook.
0:24.7	What you have to do is go to unmistakablecreative.com slash life purpose. Again, that's unmistakable creative.com slash life purpose. I'm Sreeny Rao and this is the Unmistakable Creative Podcast
0:35.2	where you get a window into the stories and insights
0:37.7	of the most innovative and creative minds,
0:40.0	started movements, built driving businesses, written bestselling books, and created insanely interesting art.
0:45.6	For more, check out our 500 episode archive at UnmistakableCreative.com.
0:53.9	Alison, welcome to The unmistakable creative.
0:55.6	Thanks so much for taking the time to join us.
0:57.5	Thanks for having me.
0:58.9	Yeah, it is my pleasure to have your.
1:00.3	As I was saying before we hit record here, I was for some strange reason, getting really
1:04.8	obsessed with this idea of risk tolerance and thinking that there's got to be something
1:07.8	written about the psychology of risk.
1:09.5	And then I happened to stumble on your book in an airport bookstore, just a title alone, an economist walks into a brothel. I was like, okay, what the hell? So I have to ask you about the title, but we'll get to that. Before we get to all that, I want to start with a question that I think is really fitting, given the nature of your work. And that is what social group we are part of in high school and what impact did that end up having on your life and the choices that you've made throughout your life
1:28.6	and your...
1:29.4	I think about this a lot because I don't know. of in high school and what impact did that end up having on your life and the choices that
1:27.8	you've made throughout your life and your career? I think about this a lot because I don't know if I was
1:32.0	like risk averse in high school, but I really was like determined not to be affiliated with a social
	...

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