The problem of prevention
AbstractMany disasters are foreshadowed by insufficient preventative care. In this paper, we argue that there is a true problem of prevention, in that insufficient care is often the result of rational calculations on the part of agents. We identify three factors that lead to dubious efforts in care. First, when objective risks of a disaster are poorly understood, positive experiences may lead to an underestimation of these risks and a corresponding underinvestment in prevention. Second, redundancies designed for safety may lead agents to take substandard care. Finally, elected officials have an incentive to underinvest in prevention for some disasters, especially those that are relatively unlikely.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2462.
Date of creation: 29 Mar 2006
Date of revision: 30 Mar 2007
Prevention; Accidents; Volunteer's Dilemma; Learning; Career Concerns;
Other versions of this item:
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-09 (All new papers)
- NEP-HEA-2007-04-09 (Health Economics)
- NEP-UPT-2007-04-09 (Utility Models & Prospect Theory)
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