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Hazards Technology and Fairness (1986) / Chapter Skim
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Pages 148-149

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From page 148...
... DESIGNING INCENTIVE SYSTEMS FOR PROTECTIVE ACTIVITIES Let us now examine the case where individuals are considering whether to adopt protective actions such as wearing a seat belt or purchasing a car with an air bag. This action involves some ex ante cost ~ C)
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From page 149...
... 6k /~°t,q~ ,-`GG~: P) ~ ~cC\~ p ':/,~ FIGURE 1 Decision tree for adoption of a protective activity.
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Key Terms

  • decision tree
  • seat belt
  • protective activities
  • protective mechanisms
  • equity issues

  • unavoidable risks


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