The Psychology of Tail Events: Progress and Challenges
- (pp. 611-16)
AbstractOver the past decade there has been a surge of interest in "tail events," or rare, high-impact events. In this article, I start by summarizing some recent progress in our understanding of the psychology of tail events. I suggest that much of this progress has centered on the concept of "probability weighting" and, in particular, on applications of this concept in various fields of economics. I then describe some major open questions in this area.
Citation2013. "The Psychology of Tail Events: Progress and Challenges." American Economic Review, 103(3): 611-16. DOI: 10.1257/aer.103.3.611
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- G22 Insurance; Insurance Companies