Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [142]
One final principle stimulated by these others has guided the activities of the Wharton Risk Center over the past twenty-five years.
Researchers’ Principle 6: Early in the process, bring together as many key interested parties as possible and listen carefully to them. If these interested parties take ownership of the ideas that are being discussed, then sit back and let them take over the process. In this regard I am reminded of a dialog that one of my mentors, Gilbert White, had with a colleague at a conference a few years ago. Someone in the audience began advocating a policy that White had proposed in writing without acknowledging that it was White’s idea. The colleague suggested to White that he point this out to the conference attendees. Gilbert’s reaction was immediate and clear: “We have a much better chance of getting this policy adopted if others believe it is their idea rather than mine!”
RECOMMENDED READING
Auserwald, Philip, Lewis Branscomb, Todd Laporte, and Erwann Michel-Kerjan (2006). Seeds of Disaster, Roots of Response. New York: Cambridge University Press.
Moss, David (2002). When All Else Fails. Cambridge, MA: Harvard University Press.
Schelling, Thomas (1978). Micromotives and Macrobehavior. New York: Norton.
Slovic, Paul (2000). The Perception of Risk. London: Earthscan.
ACKNOWLEDGMENTS
An Unusual Journey
Homage to Howard Kunreuther
ON THE WAY BACK FROM BEIJING
September 2007. I was on my way back to the United States from Beijing, China, where I attended the inaugural annual meeting of the “New Champions” jointly organized by the People’s Republic of China and the World Economic Forum—a gathering of top leaders in business, politics, nonprofits, the arts, and economics among whom “think new” was the leitmotiv. The fourteen-hour flight offered one of those rare and precious opportunities for deep, uninterrupted contemplation.
My thoughts turned to my senior colleague and friend Howard Kunreuther. Howard was about to turn 70 the following year, and I wanted to give him a party. But the challenge was to organize something different from the usual one-or two-day tribute conference where each invited colleague has about an hour to summarize his or her work with the honoree who is generally about to retire. I had to depart from that format, Kunreuther not being just another academic economist.
HOWARD KUNREUTHER, A GREAT MIND AND A TRUE PIONEER IN THE STUDY OF DECISION MAKING IN A DANGEROUS WORLD
Howard Kunreuther was trained as what many would consider a very rational economist. He received his PhD in economics from MIT in 1965. Among his advisors was Robert Solow, the famous macro-economist who was later awarded the Nobel Prize. Kunreuther easily could have taken the path of hard modeling and theoretical research. But he was deeply interested in how people behave. Soon enough, he started challenging the usual rational model of decision making by looking at how people make decisions in risky environments (at that time, he studied potential victims of major floods and earthquakes). He and his colleagues performed groundbreaking empirical investigations in the 1970s, documenting individual insurance decisions that were difficult to reconcile within the traditional economic paradigm. In that way he became an economist who studies irrationality, an irrational economist.
Today, some forty years later, Kunreuther is recognized as one of the true pioneers in the fields of both decision sciences and catastrophe risk management. He has written or edited nearly thirty books and monographs, as well as hundreds of academic papers, and has always had a passion and enthusiasm for listening to and engaging others