A More Dangerous World (March 2010)

” The earthquake in Haiti is an omen for what the new decade has in store. We will see more natural disasters, and of larger scale, in the coming years. The trend is already accelerating: more than half of the planet’s 20 costliest catastrophes since 1970 have occurred since 2001. Because of the world’s quickly growing population and larger concentration of assets in high-risk areas, and its increasing social and economic interdependency, these disasters will only increase in frequency.

Economic analysis helps determine how people will respond to this more dangerous world. But the traditional economic view suggests that human actions can be predicted as if people were always completely informed, perfectly responsive to economic fluctuations, and rational, in the sense of having stable, orderly preferences that always maximize their individual economic well-being. In fact, disasters seriously challenge this view.

The current situation in Haiti highlights three critical elements where behavioral scientists have found the rational predictions of many economists to be flawed…..”

Op-Ed jointly written with psychologist Paul Slovic in the international edition of Newsweek magazine. READ THE FULL Op-Ed: A More Dangerous World.MichelKerjan&Slovic.Newsweek.2010