Global Risk Regulation Alberto Alemanno HEC Paris Setting the - PowerPoint PPT Presentation

Cognitive biases  A cognitive bias is a pattern of deviation in judgment that occurs in particular situations  In particular,they consist in many distortions in the human mind that are difficult to eliminate and that lead to perceptual distortion, inaccurate judgment, or illogical interpretation  Studied for how they affect belief formation, business decisions, and scientific research  Cognitive biases are instances of evolved mental behavior

Cognitive biases II  Availability heuristics/probably neglect  Anchoring - the common human tendency to rely too heavily, or "anchor," on one trait or piece of information when making decisions  Loss aversion/endowment effect – A loss from the status quo perceived as more undesiderable than a gain is seen as desirable  Intuitive toxicology and « affiliation bias »  Informational cascades  Group polarization/Confirmation bias - a tendency for people to favor information that confirms their preconceptions regardless of whether the information is true  Zero-risk bias – preference for reducing a small risk to zero over a greater reduction in a larger risk.

to learn more

to learn more (2)

Lessons learned  Much what we think about risk does not make sense:  Trend to overestimate highly publicized causes of death (cancer, tornados, homicides) and underestimate more common sources of death (stroke, asthma, botulism, influenza)  Overestimate death from accidents and underestimate deaths from disease