Pathogens and probabilities

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Chapter 3 in Nudged into Lockdown?, 2022, pp 54-83 from Edward Elgar Publishing

Abstract: In this chapter, I explore the role of probabilities in understanding pandemic responses. I show that humans are not intuitive statisticians and therefore not very good in interpreting probabilities; this often leads us to overweight small probabilities and underweight large ones. I introduce readers to the concepts of base rates, expected values, expected utility and risk aversion. I also provide an overview of Prospect Theory and the idea of loss aversion. Loss aversion implies that humans are typically willing to accept larger expected losses in the future in order to avoid smaller but certain losses in the present. I discuss the implications of these findings for Covid-19 risk perceptions and policy responses.

Keywords: Economics and Finance; Politics and Public Policy Sociology and Social Policy (search for similar items in EconPapers)
Date: 2022
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