Overreaction to Fearsome Risks

16 Pages Posted: 24 Dec 2008  

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: December 3, 2008

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.

Suggested Citation

Sunstein, Cass R. and Zeckhauser, Richard J., Overreaction to Fearsome Risks (December 3, 2008). Harvard Law School Program on Risk Regulation Research Paper No. 08-17; HKS Working Paper No. RWP08-079; U of Chicago, Public Law Working Paper No. 446; U of Chicago Law & Economics, Olin Working Paper No. 253. Available at SSRN: https://ssrn.com/abstract=1319881 or http://dx.doi.org/10.2139/ssrn.1319881

Cass R. Sunstein (Contact Author)

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Richard J. Zeckhauser

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-495-1174 (Phone)
617-496-3783 (Fax)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1174 (Phone)
617-384-9340 (Fax)

Paper statistics

Downloads
1,132
Rank
11,593
Abstract Views
5,735