The existence of base rate fallacy (BRF) bias is explored employing: (i) a context treatment with a narrative story applied to asset markets and (ii) an isomorphic abstract setting using balls-and-bingo cages. Probability estimates reflect a BRF bias in both treatments, but is stronger with...

Estimates of the extra earnings for jobs with higher risks of death are used in cost-benefit studies involving risk changes. Because of this use, the magnitude and stability of the estimated coefficient are important. Part of the current study closely reproduces the 1982 study by Marin and...

Individuals exhibit systematic tendencies to overstate the risks of unlikely lethal events. If the risks of passive smoking are overstated in this manner, and if passive smoking is not harmful to adult health, then passive smoking by adults should have a discernible effect on subjective...

We use insurance behavior as a context to study affective influences in seemingly purely monetary decisions. We report two related findings. First, people are more willing to purchase insurance for an object at stake, the more affection they have for the object, holding the amount of...

This paper uses data from the Current Population Survey to analyze determinants of cigarette demand. Price elasticities for smoking participation and quantity of cigarettes smoked are between -0.4 and -0.6 for both men and women. These effects diminish for high-income individuals. The family...

In a telephone survey 1000 adults were confronted with pairs of life saving programs that differed in number of lives saved and asked which program in each pair they would choose to implement. Respondents were also asked to rate qualitative program characteristics on 10-point scales. For most...

We examined sequence effects on willingness-to-pay (WTP) when people evaluate a series of environmental goods. Each respondent evaluated five different environmental goods using WTP and four evaluative attitude ratings. There was a strong sequence effect: WTP was much larger for the first good...

A book is made for a horse race, and punters place their bets. The problem considered here is how the bookmaker should construct his book. Before this can be solved, it has to be determined how the punters will react to any proposed book. Much of the detailed discussion is confined to a race...

Previous studies of smoking risk beliefs have focused almost exclusively on risks to the smoker. Using an original set of survey data from Spain, we examine the public's perceived risks from exposures to environmental tobacco smoke. The risk categories considered included lung cancer, heart...

This paper estimates individual risk preferences based upon data that are generated by the same individuals acting in different institutions. The results show that the (estimated) numerical values of individuals' implied risk parameters are not stable within individuals across institutions....