An earlier entry on this page discussed how people make more conservative decisions if they are posed with what they can lose in that decision (as opposed to making riskier choices if they are told what they can gain).
Another factor in our decision making process is risk assessment. That is, what are my chances at this loss if I do make that decision. People are generally very poor at making risk assessments. For example, some people are very afraid to swim in the ocean because of a fear of being bitten by a shark. There are thousands of people swimming in the water at any given moment of the day and there are on average 3 or 4 shark attacks a year. A person who is afraid of swimming in the ocean because of a fear of a shark attack is greatly overestimating the probability of a shark attack. There is actually a much greater chance of being killed in an automobile crash on the way to the beach than there is of being bitten by a shark.
The more grisly the image of the feared event, the more likely one will make a mistake in overestimating the probability of the event happening. For example, being in an airplane crash is a very frightening image. Being swallowed by an alligator is also very vivid.
Gary Becker, a well-known economist, put it very succintly in discussing the fear of flying:
“The terrorist plot to blow up from 7-10 planes with liquid explosives will once again increase the fear of flying. After the 9/11 horrendous attacks, U.S. domestic air travel was down by over 10 per cent for two years, and international travel on American airlines declined much further. The magnitude of this response went far beyond what could be explained by either the increased objective risk of flying or the greater time spent going through security. For even assuming that 3 planes a year on American airlines continued to be exploded by suicide bombers, air travel would still be a lot safer than traveling by car and bus, two major alternatives to air travel.”
Another factor in our risk assessment is our exposure to the feared stimulus. That is, the less exposure we have to the feared stimulus, the more we will be afraid of it. I believe one of the reasons we don’t overestimate the risk of being in a grisly car accident is because we are frequently in cars. By constant exposure to a feared stimulus, we make more accurate risk assessments (probably most people who surf daily have little fear of sharks).
A third factor in our overestimating risks, is the media. The media provides many new fears of which we ‘should’ be afraid. Livescience.com has an apt title for an article today: “Experts Say Don’t Underestimate Threat of Morphing Monkey Viruses.” It may be unfair to single out Livescience.com because headlines of these sorts can be found anywhere. In their defense, they recently published a review of a paper discussing how the media omits facts in medical research. By paying attention to these type of media headlines (as well as gruesome images of unlikely events), we may be setting our risk assessments higher than we would otherwise.
People with anxiety have specific difficulties with risk assessment. For example, someone with social anxiety estimates the odds of making a social blunder much higher than is actually so. Asking someone with social anxiety the likelihood they will make a social blunder will be much higher than someone without social anxiety (Paradoxically, by avoiding social interactions they reduce their chance of practicing social skills and maybe actually increase the risk of social blunder.) A proven treatment for social anxiety (or other anxieties) consists of learning more about actually risks, so that a person can make better estimates of the actual risks involved. It also includes exposing him or her to the feared stimulus. With repeated exposure to what a person fears, he or she will become less anxious in those situations.