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Rare disaster information can increase risk-taking

Abstract

The recent increase in the frequency and impact of natural disasters1 highlights the need to provide the public with accurate information concerning disaster prevalence. Most approaches to this problem assume that providing summaries of the nature and scale of disasters will lead people to reduce their exposure to risk2. Here we present experimental evidence that such ex post ‘news reports’ of disaster occurrences can increase the tolerance for risk-taking (which implies that rare events are underweighted3). This result is robust across several hundred rounds of choices in a simulated microworld, persists even when the long-run expected value of risky choices is substantially lower than safe choices, and is contingent on providing risk information about disasters that have been (personally) experienced and those that have been avoided (‘forgone’ outcomes). The results suggest that augmenting personal experience with information summaries of the number of adverse events (for example, storms, floods) in different regions may, paradoxically, increase the appeal of a disaster-prone region. This finding implies a need to communicate long-term trends in severe climatic events, thereby reinforcing the accumulation of events, and the increase in their associated risks, across time4.

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Figure 1: Screenshot of the GeoRisk Microworld used in the experiments.
Figure 2: The mean proportion of risky choices (selection of a house in one of the two risky areas) in the moderate and severe environments.

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Acknowledgements

This study was supported by the Leverhulme Trust (RPG-384), by the I-CORE programme of the Planning and Budgeting Committee and the Israel Science Foundation (Center No. 41), and by the Australian Research Council (LP120100224). B.R.N. received salary support from an Australian Research Council Future Fellowship (FT110100151) and acknowledges support of the ARC Centre of Excellence for Climate System Science (CE110001028). We thank A. Kary and R. Parikh for assistance with data collection and T. Lejarraga for insightful comments on an earlier draft.

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B.R.N., T.R. and E.Y. devised and designed the experiments. M.S. developed the computer program and implemented the designs. B.R.N. and T.R. oversaw the running of the experiments. B.R.N., T.R. and E.Y. conducted the data analyses and wrote the paper.

Corresponding author

Correspondence to Ben R. Newell.

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The authors declare no competing financial interests.

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Newell, B., Rakow, T., Yechiam, E. et al. Rare disaster information can increase risk-taking. Nature Clim Change 6, 158–161 (2016). https://doi.org/10.1038/nclimate2822

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