Dinner with Bayes: On the revision of risk beliefs

Abstract

We study how people form and revise health risk beliefs based on food safety information. In an online experiment, subjects stated their perceived risk of contracting a foodborne illness before and after receiving information about the population average risk and the eating habits of the average consumer. Precautionary effort in handling and preparing food reduced prior risk beliefs, but did not affect the belief revision process. About one quarter of subjects either fully ignored the information provided or revised their beliefs inconsistently with the Bayesian learning hypothesis. We find several factors related to the subjects’ numerical skills that explain information refusal and inconsistent belief revisions and discuss them in the context of health risks.

Experience of shocks, household wealth and expectation formation: Evidence from smallholder farmers in Kenya

“…How decision‐makers change their forecasts of shocks also depends on the type of shock. As argued by Rheinberger and Hammitt (2018), individual‐specific factors affect decision‐makers’ confidence in new information when updating expectations about incurring an adverse event. In addition, whether experiencing a shock provides any information regarding the likelihood of future shock‐affectedness varies by the type of shock.…”

“…In line with social learning theories, decision‐makers also derive new information about the likelihood of an adverse shock by observing the experience of others (Gallagher, 2014; Viscusi & Zeckhauser, 2015; Wachinger et al., 2013). However, decision‐makers are likely to discount such indirect information, depending on how personally relevant it is to them (Viscusi & Zeckhauser, 2015), which in turn depends on individual specific factors (Rheinberger & Hammitt, 2018; Viscusi, 1989). When we assume that information about the likelihood of incurring an adverse shock is private and imperfect, how farmers will react when they observe other farmers in their village experiencing shocks depends on how similar they believe they are in terms of exposure and behavioural factors that influence the likelihood of incurring shocks.…”

“…It has been argued that the Bayesian updating process is cognitively too demanding to be realistically applied by humans. Another problem when analysing the determinants of expectations about personal risks is the fact that subjects can influence it and have unobservable, private risk information (Lloyd‐Smith et al., 2018; Rheinberger & Hammitt, 2018). Strictly speaking, such risks are non‐exogenous.…”

Risk Perception, Learning, and Willingness to Pay to Reduce Heart Disease Risk

“…11 After accounting for individual differences in behaviors that increase or decrease risk, about 84 % of respondents in the Rheinberger and Hammitt (2018) study updated in the expected direction. equals R i0 , 0 ≤ R io ≤ 1: She then receives J estimates of objective risk, denoted by S j , j = 1,…,J, and updates her prior probability beliefs according to the Bayesian updating rule…”

Risk Feeling Index of Autonomous Vehicle Behavior

“…It is known that the larger the prediction error, the more attention a person dedicates to obtaining information and to learning new stimuli to update existing knowledge [6]. There are two types of expected effects: assimilation, which underestimates the prediction error when the prediction error is small, and contrast, which overestimates the prediction error when the prediction error is large.…”