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《今回のworkshop》
○Risk-Averse and Risk-Seeking Behaviour in Disaster Prevention
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＜Agenda＞

Risk-Averse and Risk-Seeking Behaviour in Disaster Prevention

Japan has been known as one of the most disaster-prone countries for many decades. It has earthquakes, typhoons, landslides, snowstorms, etc. Every part of Japan is at risk of being a victim of these natural disasters. Then, it seems that Japanese people are highly literate in disaster prevention and can make rational decisions when they face risky situations. However, a study indicates that this assumption is not correct based on two findings.

Normalcy bias is a cognitive bias that leads people to ignore or underestimate threat warnings. While many studies of disaster risk psychology frequently apply normalcy bias, according to the research, it cannot explain people’s decision-making process in preparation for a disaster. Instead, they prefer to apply prospect theory.

Prospect theory, developed by Daniel Kahneman and Amos Tversky in 1979, is a theory known as a basic idea of behavioural economics. The theory describes how people react differently between potential gains and potential losses. How the majority of people answer the following questions will give you a better understanding of prospect theory.

The first question asked whether they choose A) you get $25,000 or B) you have a 50% chance of getting $50,000. The second question asked whether they choose A) you lose $25,000 or B) you have a 50% chance of losing $50,000.

The majority chose A) in the first question and B) in the second question. From these responses, it turned out that when individuals face a risky decision leading to gains, they are risk-averse, preferring solutions that lead to a lower expected utility but with a higher certainty. On the other hand, when individuals face a risky decision leading to losses, they are risk-seeking, preferring solutions that lead to a lower expected utility as long as it has the potential to avoid any losses.

Similar questions adjusted to disaster risk psychology will be presented at the beginning of the workshop. Your answers will be different depending on how old you are, where you live, who you live with, and your literacy level in disaster prevention.

The study also points out a non-linear relation between the degree of individuals’ disaster prevention literacy and their risk-averse behaviours. In general, those with high literacy in disaster prevention try to take risk-averse actions, such as evacuating in advance or stockpiling some food for an emergency. People with low literacy in disaster prevention, of course, make some preparations to avoid risk as well.

However, the survey result shows that when the threat reaches a certain level, they tend to stop taking actions to protect themselves. This is due to the fact that when TV and other media inadvertently emphasize the threat of imminent disasters, those who are not familiar with disaster prevention give up taking risk-averse actions, resulting in more extensive damage to society.

<References>

 <Questions>

1. How would you answer the question on seismic retrofitting (strengthening your house for earthquakes)?
What kind of factors influenced your decision?
*The topic maker will share the question in the presentation.

2. What are the situations where you were most risk-seeking despite being aware of the risk involved?
***Note that “risk” here is not just physical injury, and any decision involves some trade-off.

3. What is your impression of how the media communicate disaster risks to the public?
Do you think they purvey information appropriately?
Do you think they emphasize the threat too much, or they don’t emphasize it enough?

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