Intervention

Zero risk bias and improbable risk

The authors examine risk preferences through prices for a pesticide. They present groups the scenario of a $10 pesticide that rarely produces a toxic reaction. When asked how much they would pay for a similar pesticide that reduced the risk to even less, people were willing to pay a significant amount considering the cost of the pesticide. This finding displays that even when the change in risk is negligible, people overvalue the elimination of risk.

Biases Used

Bias

Other Applications: Savings and Financial Decisions