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The problem of prevention

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  • Benoît, Jean-Pierre
  • Dubra, Juan

Abstract

Many disasters are foreshadowed by insufficient preventative care. In this paper, we argue that there is a true problem of prevention, in that insufficient care is often the result of rational calculations on the part of agents. We identify three factors that lead to dubious efforts in care. First, when objective risks of a disaster are poorly understood, positive experiences may lead to an underestimation of these risks and a corresponding underinvestment in prevention. Second, redundancies designed for safety may lead agents to take substandard care. Finally, elected officials have an incentive to underinvest in prevention for some disasters, especially those that are relatively unlikely.

Suggested Citation

  • Benoît, Jean-Pierre & Dubra, Juan, 2006. "The problem of prevention," MPRA Paper 2462, University Library of Munich, Germany, revised 30 Mar 2007.
    • Handle: RePEc:pra:mprapa:2462
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    References listed on IDEAS

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    1. Juan Dubra, 2004. "Optimism and Overconfidence in Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 198-218, January.
    2. Jean‐Pierre Benoît & Juan Dubra, 2013. "On The Problem Of Prevention," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 787-805, August.
    3. Glenn MacDonald & Leslie M. Marx, 2001. "Adverse Specialization," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 864-899, August.
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    Cited by:

    1. Jean‐Pierre Benoît & Juan Dubra, 2013. "On The Problem Of Prevention," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 787-805, August.

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    More about this item

    Keywords

    Prevention; Accidents; Volunteer's Dilemma; Learning; Career Concerns;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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