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Full-Text Articles in Consumer Protection Law
Estimation Of Revealed Probabilities And Utility Functions For Product Safety Decisions, W. Kip Viscusi, William N. Evans
Estimation Of Revealed Probabilities And Utility Functions For Product Safety Decisions, W. Kip Viscusi, William N. Evans
Vanderbilt Law School Faculty Publications
Using survey data on consumer product purchases, this paper introduces an approach to estimate jointly individual utility functions and risk perceptions implied by their decisions. The behavioral risk beliefs reflected in consumers risky decisions differ from the stated probabilities given to them in the survey. These results are not consistent with a Bayesian learning model in which the information respondents utilize is restricted to what the survey presents. The results are, however, potentially consistent with models in which prior risk information is influential or models in which people do not act in a fully rational manner.
Adaptive Responses To Chemical Labeling: Are Workers Bayesian Decision Makers?, W. Kip Viscusi, Charles J. O'Conner
Adaptive Responses To Chemical Labeling: Are Workers Bayesian Decision Makers?, W. Kip Viscusi, Charles J. O'Conner
Vanderbilt Law School Faculty Publications
A fundamental issue in the economics of uncertainty is how individuals process information and make choices under uncertainty. In a recent analysis of the findings on risk perception, Kenneth Arrow (1982) concluded that the evidence regarding individual rationality was, at best, quite mixed. A prominent example of apparent irrationality of actual consumer behavior is that consumers, who presumably are risk averse, have failed to purchase heavily subsidized federal flood insurance. In the case of the market for hazardous jobs, which is the focus of this study, Viscusi (1979) found that workers' risk perceptions were positively correlated with the industry risk …