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Psychologists define risk tolerance as a relatively stable characteristic, reflecting core personality traits. Risk tolerance is, nonetheless, subject to change, as individuals age, respond to recent events set in the context of their past and present life circumstances, their behavioral biases, and their assessment of risk and reward. And risk tolerance is domain-specific. The same person can have a high tolerance for risk in investments, while prioritizing safety when arranging a blind date.

In Worth the Risk: The Seven Myths That Keep Us from Taking the Chances We Need To Take, Allison Schrager (a senior fellow at the Manhattan Institute and author of An Economist Walks Into A Brothel: And Other Unexpected Places To Understand Risk) argues that Americans have become increasingly risk-averse, a development that portends diminished returns and higher costs for them and the United States. The world, she declares, “has never been safer, and there has never been a better time to take risks.”

Focused mostly, but not exclusively, on financial and investment decisions, Schrager’s book is adorned with thumbnail sketches of risk-takers, including Harland Sanders, the founder of Kentucky Fried........

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