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Equivalent Frames Of Reference For Judging Risk Regulation Policies, W. Kip Viscusi
Equivalent Frames Of Reference For Judging Risk Regulation Policies, W. Kip Viscusi
Vanderbilt Law School Faculty Publications
Although the design of risk regulations has not yet attained what might be termed the economist's ideal of maximizing the difference between benefits and costs, substantial progress has been made in the design of regulatory policy. When the risk regulation agencies began their efforts in the early 1970s, there was widespread concern that something needed to be done to address the important risks that society faces. The substantial optimism with respect to our technological capabilities in reducing risk may have led to a failure to recognize the limits of our risk regulation ventures. Over time, there has been increasing emphasis …
Are Individuals Bayesian Decision Makers?, W. Kip Viscusi
Are Individuals Bayesian Decision Makers?, W. Kip Viscusi
Vanderbilt Law School Faculty Publications
There has been increasing interest in whether normative models of individual choice under uncertainty accord with actual behavior. These concerns have been much greater than in other economic contexts because of the particularly severe demands such decisions place on the rationality of the decision maker. The limitations of these decisions have widespread consequences, as they provide the rationale for many governmental efforts to regulate the risks people face. Here I explore the issues raised by a Bayesian decision framework, focusing particularly on my analyses of worker and consumer behavior.