We thank Martín Besfamille, Federico Echenique, Emeric Henry, Ennio Staccetti, and Federico Weinschelbaum for their comments. Benoît acknowledges the support of the C.V. Starr Center at NYU, and Dubra thanks the support from ANII through the Fondo Clemente Estable. Please address correspondence to: Juan Dubra, Department of Economics, Universidad de Montevideo, Prudencio de Pena 2440, Montevideo, 11.600, Uruguay. Phone: 598 98 005826. E-mail: firstname.lastname@example.org.
ON THE PROBLEM OF PREVENTION
Article first published online: 17 JUL 2013
© (2013) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
International Economic Review
Volume 54, Issue 3, pages 787–805, August 2013
How to Cite
BENOÎT, J.-P. and DUBRA, J. (2013), ON THE PROBLEM OF PREVENTION. International Economic Review, 54: 787–805. doi: 10.1111/iere.12017
- Issue published online: 17 JUL 2013
- Article first published online: 17 JUL 2013
- Manuscript Revised: DEC 2011
- Manuscript Received: JUN 2008
- C.V. Starr Center at NYU
- ANII through the Fondo Clemente Estable
Disasters are often precipitated by insufficient preventive care. We argue that there is a problem of prevention in that this lack of care often stems from agents’ rational calculations. Positive experiences lead agents to underestimate the risks of disasters; technological improvements and redundancies designed for safety induce agents to reduce their care. Although lower care increases the chances of an accident, the number of redundancies can be adjusted to offset this. However, the accident probability remains constant even as ostensible improvements in safety are made. Checklists can be used to decrease the number of accidents.