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Description:
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The purpose of this study is to explore the relationship between individuals' risk perceptions and their willingness -to -pay for increased safety in low -probability , high consequence risk situations . In order to explore this relationship , we first review some previous theoretical models on individual decision making in risky situations , specifically for low -probability , high -consequence risks . Although standard economic theories have built a substantial framework to explain behavioral responses to risks , they are not fully adequate to describe people's decisions under some uncertain and risky situations , particularly for low -probability events (Camerer and Kunreuther , 1989 ) . Therefore , empirical investigations become crucial . Consistent with McClelland , Shulze , and Coursey (1993 ) , we believe that field and lab studies provide complementary information for low -probability risks . |