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Posts Tagged ‘risk’

Dare to Diversify

Ian Ayres’s new book discusses diversifying risk across time.

A Snus Conundrum

Will snus, a possible replacement for cigarettes, ultimately lead to more smoking?

Bagel Danger

Americans ate an estimated 3 billion bagels at home last year, an average of about 11 per person (this doesn’t include bagels eaten at work, where a not-completely-insignificant number are delivered by bagel economist Paul Feldman). And in the course of slicing up all those bagels, 1,979 people cut their fingers so badly that they ended up in an emergency room.

No Vaccine? A Different Risk

Paul Offit is one of America’s most-hated scientists. He’s been called a “biostitute” for the pharmaceutical industry and been threatened with death for his advocacy of one of medicine’s greatest innovations: vaccines. In recent years, anti-vaccine sentiment has spread like, well, an epidemic, with frightening results.

Scaling the Heights of Corporate Greed: Chafkin and Lo on Risk

Andrew W. Lo, who teaches at M.I.T. and is director of its Laboratory for Financial Engineering, has contributed to this blog before. Here he is joined by co-author Jeremiah H. Chafkin, president of AlphaSimplex Group (where Lo also serves as chairman and chief scientific officer) for a guest post about the best (and worst) ways to manage risk.

When Pricing Saves Lives

The Unthinkable author Amanda Ripley points to an interesting story about child safety in air travel. In the 1990’s, a call went out for the F.A.A. to stop letting air-traveling parents carry young children in their laps, making them buy a ticket for their children instead, so that every person could wear a seatbelt. The F.A.A. refused, saying that the cost of an extra ticket could force parents to travel by car instead.

Survival Tips From Mockingbirds

We’ve blogged before about how people fear strangers more than they should, whereas it’s the people you know who often cause trouble. According to this new study, urban mockingbirds may be better at risk assessment than people. It found that the birds apparently learn to recognize the faces of people they’ve seen before and, based on past encounters with an individual, assess how threatening they are; but they aren’t as fearful of complete strangers. (HT: VSL) [%comments]

How Are Gliders Like Nuclear Deterrence?

In the years since the Cold War, the threat of imminent global thermonuclear war has receded in the popular imagination. Computer hackers are buying up abandoned missile silos. It’s been almost a decade since a major Hollywood film revolved around a U.S.-Russian nuclear exchange. But that doesn’t mean deterrence has succeeded in finally staving off nuclear war. Stanford University Professor Emeritus Martin Hellman, comparing his love of gliders with his interest in nuclear deterrence, wants to remind you that when a system is 99.9 percent safe but the remaining 0.1 percent contains an absolutely catastrophic outcome, it’s not a great system. Sound familiar?

Misadventures in Risk Management

| While A.I.G. continues to dominate the news, it’s worth reading this 2002 Economist article, which cast doubt on the insurance giant’s early forays into the derivatives market. Back then, A.I.G. argued that “derivatives play an important part in reducing the company’s overall risk.” By 2009, those same investments had left the company so badly damaged that it posed a . . .

How Diversifying Helps a Lawsuit

A related set of lawsuits involving billions of dollars has provided employment opportunities for a number of consulting economists specializing in antitrust issues or labor economics issues. I’ve been involved in three of the cases, and they have been great fun (and a good way of paying dental bills). I was crestfallen to find out that I am not likely . . .

The Cost of Fearing Strangers

What do Bruce Pardo and Atif Irfan have in common? In case you’re not familiar with their names, let me rephrase: What do the white guy who dressed up as Santa and killed his ex-wife and her family (and then committed suicide) and the Muslim guy who got thrown off a recent AirTran flight on suspicion of terrorism have in . . .

Year-End Clearance: All Medical Myths Must Go!

Sorry, moms: it turns out that reading in low light won’t make you go blind; going hatless in the winter won’t make you freeze to death; and you could eat poinsettias all day and not be poisoned. All this holiday medical myth-busting and more is courtesy of our somber friends at the British Medical Journal (part one and part two). . . .

Surviving Holiday Air Travel

Time‘s Amanda Ripley reminds us that last week’s crash of a Continental Airlines Jet in Denver wasn’t especially unusual. That’s because, as is typical of plane crashes, everyone survived. In this case, flight attendants and passengers worked together to evacuate the plane quickly after it veered off the runway during takeoff, crashing into a ditch and bursting into flames. Levitt . . .

The FREAK-est Links

Riskometer helps put health warnings in perspective. The wildest contract perks that MLB players have demanded, and gotten. (Earlier) Game theory expert confesses to wife’s murder. New study links entrepreneurs and dyslexia.

How Are You Supposed to Know How Drunk You Are?

Sometimes a good idea is so obvious that you can’t believe no one has made it happen yet. That would seem to be the case with something called the Impair Aware Alcohol Level Indication System. It’s a machine you can put in a bar or restaurant that lets you measure your blood alcohol level so you know if you’re fit . . .

When a Pack of Cigarettes Costs $222

Kip Viscusi, who teaches economics and law at Vanderbilt Law School, has written widely and well on the risky choices that people make, especially smoking. A new working paper, co-authored with Joni Hersch, attempts to put a price on each pack of cigarettes smoked: This article estimates the mortality cost of smoking based on the first labor market estimates of . . .

What Is the State of U.S. Disaster-Preparedness? A Freakonomics Quorum

In the last few years, magazine covers and newspaper front pages have often been dominated by disaster coverage: wildfires in California, hurricanes in the Gulf and elsewhere, and of course the Sept. 11 attacks and their myriad repercussions. (Whether the incidence of such events is higher or coverage is just noisier is a separate question, which is addressed below.) So . . .

Scarier Halloween Costume: A Pirate, or Kim Jong-il?

Yesterday, a U.S. Navy destroyer helped the crew of a North Korean freighter recapture their vessel from a band of marauding pirates off the coast of Somalia. It’s an unusual news item, not because piracy is rare — around the world, pirate attacks have surged over the last decade — but because we’re more used to hearing about the dire . . .

Will Bicycling to Work Get You Killed?

Bicycle commuting is on the rise, as evidenced by the following articles in, the Boston Herald, and USA Today. But if the idea of hitting the road on two wheels — with little to protect you from cars and trucks but good manners — strikes you as pretty risky, you aren’t so far from the mark. Per kilometer, cyclists . . .

Terrorism, Part II

Levitt responds to the fiery criticism of his previous post, “If You Were a Terrorist, How Would You Attack?”

Flying to Brazil

I am scheduled to fly to Sao Paulo, Brazil, in September for a lecture and then to Rio de Janeiro for a book festival. I have never been to Brazil before and, until this horrible plane crash in Sao Paulo the other day, I was very much looking forward to the trip. Now I am not. As someone who flies . . .

The sad thing about “Deal or No Deal”

Being a contestant on this show requires no talent whatsoever. You pick suitcases. You decide whether you prefer a riskless offer of money to a risky one. Then you go home with a bunch of money. Along the way, the crowd and your chosen friends scream and cheer like there is great skill in choosing among ex ante identical suitcases. . . .

Every Econ PhD Student in the World Had His Tivo on Tonight

Or at least somebody should be taping this new game show Deal or No Deal so they can write a paper about it. On the show, contestants get a suitcase with some amount of money in it and they get to keep the contents or take a certain offer that some “banker” on the phone is offering. A good chance . . .

Another “Freakonomics” Mishap

A few days ago, we blogged about a college kid who got kicked out of class for citing Freakonomics. Now comes even worse news — from a reader who claims that he was asked to leave the premises of a job for simply owning the book. I’m somewhat skeptical of the verity of this story; judge for yourselves: Mr. Levitt . . .