Overreaction to Fearsome Risks

Richard Zeckhauser

Working Paper Series from Harvard University, John F. Kennedy School of Government

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.

Date: 2008-12
New Economics Papers: this item is included in nep-cbe
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Overreaction to Fearsome Risks (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:harjfk:rwp08-079

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