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Overreaction to Fearsome Risks

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Author Info

  • Cass Sunstein
  • Richard Zeckhauser

    ()

Abstract

Fearsome risks are those that stimulate strong emotional responses. Such risks, which usually involve high consequences, tend to have low probabilities, since life today is no longer nasty, brutish and short. In the face of a low-probability fearsome risk, people often exaggerate the benefits of preventive, risk-reducing, or ameliorative measures. In both personal life and politics, the result is damaging overreactions to risks. We offer evidence for the phenomenon of probability neglect, failing to distinguish between high and low-probability risks. Action bias is a likely result.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10640-010-9449-3
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 48 (2011)
Issue (Month): 3 (March)
Pages: 435-449

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Handle: RePEc:kap:enreec:v:48:y:2011:i:3:p:435-449

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Action bias; Availability bias; Biased assessment; Risk regulation; Risk perception; D81; Q51; D61; H4;

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References

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  1. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  2. Sunstein,Cass R., 2002. "Risk and Reason," Cambridge Books, Cambridge University Press, number 9780521791991, October.
  3. Patt, Anthony & Zeckhauser, Richard, 2000. " Action Bias and Environmental Decisions," Journal of Risk and Uncertainty, Springer, vol. 21(1), pages 45-72, July.
  4. James T. Hamilton & W. Kip Viscusi, 1999. "Calculating Risks?: The Spatial and Political Dimensions of Hazardous Waste Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262082780, December.
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Cited by:
  1. Zeckhauser, Richard J. & Toman, Michael & Rostapshova, Olga & Kousky, Carolyn, 2009. "Responding to Threats of Climate Change Mega-Catastrophes," Working paper 629, Regulation2point0.
  2. Gernot Wagner & Richard Zeckhauser, 2012. "Climate policy: hard problem, soft thinking," Climatic Change, Springer, vol. 110(3), pages 507-521, February.
  3. repec:pdn:wpaper:45 is not listed on IDEAS
  4. Olivier Chanel & Graciela Chichilnisky, 2009. "The influence of fear in decisions: Experimental evidence," Journal of Risk and Uncertainty, Springer, vol. 39(3), pages 271-298, December.
  5. James K. Hammitt, 2013. "Positive versus Normative Justifications for Benefit-Cost Analysis: Implications for Interpretation and Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(2), pages 199-218, July.

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