Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 20, 2022 erstellt
Beschreibung:
There is something visceral about fear. You feel it in a way that you don’t feel risk. Some people think that fear affects decisions by changing people’s probability judgements about the outcomes that might be experienced upon choosing one of the available alternatives from the problem space. Fear affects decisions because fear makes people want to run and hide from the problem space. Information economics needs a straightforward way to deal with this. To show how fear affects the decision-making process without changing expectations about outcomes or probabilities, we imagine a haunted house where the new owner must decide (1) which rooms are safe to sleep in; and (2) which rooms must be sealed off to prevent the haunting from spreading throughout the house. We show how Weitzman’s (1979) solution to the “Pandora’s Box” problem can be adapted to this purpose