Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [62]
In this light, it is not surprising that visualization or imagery matters a great deal to people’s reactions to risks. Vivid images can produce palpable overreactions, as Paul Slovic and co-authors show in their work on the affect heuristic (Slovic et al., 2002). When an image of a bad outcome is easily accessible, people will become greatly concerned about a risk (Loewenstein et al., 2001). An interesting anomaly is that when people are asked how much they will pay for flight insurance for losses resulting from “terrorism,” they will pay more than if they are asked how much they will pay for flight insurance from all causes (which by definition includes terrorism) ( Johnson et al., 1993).6 The likely explanation for this peculiar result is that the word terrorism evokes vivid images of disaster, outrage, or both, thus inhibiting judgments about probability differences. Note also that when people discuss a low-probability risk, their concern rises even when the discussion consists mostly of apparently trustworthy assurances that the likelihood of harm is infinitesimal (Alhakami and Slovic, 1994). The discussion helps them to visualize the risk, thus making it more frightening. The most sensible conclusion is that with respect to risks of injury or harm, graphic images of disaster can overwhelm the cognitive activity required to conclude that the probability of disaster is actually small.
CONCLUSION
Dreadful possibilities activate emotions and make people insensitive to the probabilities of harm.7 Terrible outcomes that are easy to visualize trigger large-scale changes in thought and behavior even if the statistical risk is dramatically lower than those associated with many other activities with equivalent stakes that do not arouse public concern. Probability neglect helps to explain public overreaction to highly publicized, low-probability risks, including those posed by sniper attacks, abandoned hazardous waste dumps, anthrax, and, perhaps more generally, terrorism.
RECOMMENDED READING
Alhakami, A. S., and P. Slovic (1994). “A Psychological Study of the Inverse Relationship Between Perceived Risk and Perceived Benefit.” Risk Analysis 14: 1085-1096.
Johnson, E. J., J. Hershey, J. Meszaros, and H. Kunreuther (1993). “Framing, Probability Distortions, and Insurance Decisions.” Journal of Risk and Uncertainty 7, no. 1: 35-51.
Kahneman, D., and A. Tversky (1979). “Prospect Theory: An Analysis of Decision Under Risk.” Econometrica 47: 263-291.
Loewenstein, G., and J. S. Lerner (2003). “The Role of Affect in Decision Making,” in R. Davidson, K. Scherer, and H. Goldsmith, eds. Handbook of Affective Sciences. Oxford: Oxford University Press.
Loewenstein, G. F., E. U. Weber, C. K. Hsee, and E. S. Welch (2001). “Risk as Feelings.” Psychological Bulletin 127: 267-286.
Patt, A., and Richard Zeckhauser (2000). “Action Bias and Environmental Decisions.” Journal of Risk and Uncertainty 21, no. 1: 45-72.
Rottenstreich, Y., and C. Hsee (2001). “Money, Kisses, and Electric Shocks: On the Affective Psychology of Risk.” Psychological Science 12: 185-190.
Sandman, P., N. D. Weinstein, and W. K. Hallman (1998). “Communications to Reduce Risk Underestimation and Overestimation.” Risk Decision and Policy 3, no. 2: 93- 108.
Slovic, P., M. L. Finucane, E. Peters, and D. G. MacGregor (2002). “The Affect Heuristic.” In T. Gilovich, D. Griffin, and D. Kahneman, eds. Heuristics and Biases: The Psychology of Intuitive Judgment. New York: Cambridge University Press.
Sunstein, C. (2002). “Probability Neglect: Emotions, Worst Cases, and Law.” Yale Law Journal 112: 61-107.
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Why We Still Fail to Learn from Disasters
ROBERT MEYER
It is often said that people are poor learners