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Managing a Low‐Incidence Risk: The Example of Toxic Shock Syndrome

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  • Elke U. Weber

Abstract

This article demonstrates a methodology that allows individuals to reach a personal decision on the use of products which carry very small risks to health and life but also offer considerable benefits. A combination of the principles of dominance, extended dominance, and various methods of direct risk–benefit tradeoffs are shown to reduce the number of possible decisions regarding product use to the one optimal for the value structure of a particular individual. An historical examination of toxic‐shock syndrome identifies tampons as a product with risks too small to warrant public intervention but too sizeable to be ignored. The methodology described here can be applied for all such products.

Suggested Citation

  • Elke U. Weber, 1985. "Managing a Low‐Incidence Risk: The Example of Toxic Shock Syndrome," Risk Analysis, John Wiley & Sons, vol. 5(1), pages 73-84, March.
    • Handle: RePEc:wly:riskan:v:5:y:1985:i:1:p:73-84
    DOI: 10.1111/j.1539-6924.1985.tb00153.x
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    References listed on IDEAS

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    1. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    2. Milton C. Weinstein & Donald S. Shepard & Joseph S. Pliskin, 1980. "The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 373-396.
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