The psychology of human risk preferences and vulnerability to scare-mongers: experimental economic tools for hypothesis formulation and testing

Journal of Cognition and Culture 16 (5):383-414 (2016)

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Abstract
The Internet and social media have opened niches for political exploitation of human dispositions to hyper-alarmed states that amplify perceived threats relative to their objective probabilities of occurrence. Researchers should aim to observe the dynamic “ramping up” of security threat mechanisms under controlled experimental conditions. Such research necessarily begins from a clear model of standard baseline states, and should involve adding treatments to established experimental protocols developed by experimental economists. We review these protocols, which allow for joint estimation of risk preferences and subjective beliefs about probabilities and their distributions. Results we have obtained on such estimates, from populations in various countries, are gathered for comparison. Most people show moderate risk aversion in non-alarmed states. We also find universal heterogeneity in risk preference structures, with substantial sub-samples weighting probabilities in such a way as to display “probability pessimism”, while others make risky choices in accordance with expected utility theory.
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Reprint years 2016
DOI 10.1163/15685373-12342185
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The Intentional Stance.Daniel Dennett - 1987 - Journal of Philosophy 87 (4):212-216.
Rational Decisions.Ken Binmore - 2011 - Princeton University Press.
Picoeconomics.George Ainslie - 1993 - Behavior and Philosophy 20:89-94.
Prospect Theory: An Analysis of Decision Under Risk.Daniel Kahneman & Amos Tversky - 1979 - Econometrica: Journal of the Econometric Society:263--291.

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