2020/07/06 by Aurélien Baillon, Han Bleichrodt, Aysil Emirmahmutoglu +2 · 1 citation
Decision Sciences · Economics, Econometrics and Finance · Psychology · #Decision-Making and Behavioral Economics #Health Systems, Economic Evaluations, Quality of Life #Behavioral Health and Interventions
paper · doi:10.1287/opre.2019.1910
Prevention efforts, such as quitting smoking, flu vaccination, and exercising, are of crucial importance in health policy, but people tend to undertake too few of them. The main reason is that most prevention efforts only reduce but do not completely eliminate the risk of poor health. This makes it harder for people to assess the benefits of prevention, because they tend to misperceive and transform probabilities. In “When Risk Perception Gets in the Way: Probability Weighting and Underprevention,” Baillon et al. introduce psychological insights (probability weighting) in a model of optimal decision making and show that most people undertake too little prevention when the risk of poor health is between 10% and 80%. The paper discusses several policy measures to make people spend more on prevention.