Coase-Sandor Working Paper Series in Law and Economics

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Law & Economics Working Papers


Human beings are prone to "misfearing": Sometimes they are fearful in the absence of significant danger, and sometimes they neglect serious risks. Misfearing is a product of bounded rationality, and it produces serious problems for individuals and governments. This essay is a reply to a review of Laws of Fear by Dan M. Kahan, Paul Slovic, Donald Braman, and John Gastil, who contend that "cultural cognition," rather than bounded rationality, explains people's fears. The problem with their argument is that cultural cognition is a product of bounded rationality, not an alternative to it. In particular, cultural differences are largely a product of two mechanisms. The first involves social influences, by which people's judgments are influenced by the actual or apparent views of others. The second involves "normative bias," by which people's factual judgments are influenced by their moral and political commitments. Once cultural cognition is thus understood, it can be seen that democratic governments need not respond to people's fears, regardless of their foundations. Democracies respond to people's values, but not their errors.



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