Why do people smoke or drive without seat belts? That these behaviors are risky is not exactly news. One could argue that many smokers are addicted, but that argument just pushes the question back a step. Why do people start smoking if they know that cigarettes are addictive and that smoking is dangerous? One possibility is that people who make risky choices like risk. Another is that they misunderstand the risks they are taking. For example, many people appear to underestimate health risks, and this underestimation is a factor in their decision not to buy insurance. Another way to describe underestimation of risk is to say that people are overconfident. Whether we should treat this choice as the result of overconfidence, bad information about risk, or difficulty in understanding the meaning of risks does not matter too much. Any of these will lead to poor decisions.
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