Low-probability rational spillovers
AbstractWe find evidence of "rationality spillovers" in low-probability high-severity risks. People adjust their valuation of high probability events and preferences as they reduce preference reversals. We find insensitivity to scope for food safety illnesses with the lowest probabilities.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 110 (2011)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/ecolet
Rationality Low-probability Preference reversals Arbitrage;
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