Low-probability rational spillovers

We find evidence of “rationality spillovers” in low-probability high-severity risks. People adjust their valuation of high probability events and preferences as they reduce preference reversals. We find insensitivity to scope for food safety illnesses with the lowest probabilities.

Saved in:
Bibliographic Details
Published inEconomics letters Vol. 110; no. 1; pp. 25 - 27
Main Authors Kivi, Paul A., Shogren, Jason F.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 2011
Elsevier
SeriesEconomics Letters
Subjects
Arbitrage
Low-probability
Preference reversals
Preferences
Rationality
Rationality Low-probability Preference reversals Arbitrage
Risk management
Arbitrage
D81
Rationality
C9
Low-probability
Preference reversals
Online AccessGet full text

Cover

More Information
Summary:We find evidence of “rationality spillovers” in low-probability high-severity risks. People adjust their valuation of high probability events and preferences as they reduce preference reversals. We find insensitivity to scope for food safety illnesses with the lowest probabilities.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2010.09.017