Howard Kunreuther


Howard C. Kunreuther is an American economist. He is the James G. Dinan professor emeritus of decision sciences and public policy at the Wharton School of the University of Pennsylvania.

Background

He received an A.B. in economics from Bates College, and a PhD in the same subject from the Massachusetts Institute of Technology. He is a fellow of the American Association for the Advancement of Science, and a distinguished fellow of the Society for Risk Analysis.
His research focuses on managing and financing losses due to technological and natural hazards such as high-level radioactive waste repositories, and extreme events such as climate change, terrorism, earthquakes, floods, and hurricanes.

Research

Interdependent Security

In an interdependent world, the risks faced by any one agent depend not only on its choices but also on those of others. One weak link in a system can cause large losses to others. An example is the bombing of Pan Am Flight 103 in 1988: the bomb was loaded onto a plane at a low-security airport in Malta and transferred to Pan Am 103 where it was set to explode when the plane was 25,000 feet in the air.

Guiding Principles for Insurance

It is important to understand why people often do not purchase insurance voluntarily. When dealing with uncertain and risky events, individuals tend to be myopic, optimistic and to prefer the status quo. A behavioral risk audit addresses these cognitive biases so that individuals are more likely to pay attention to the potential consequences of low-probability events. Remedial solutions are proposed that work with rather than against people’s risk perceptions and decision biases. When combined with short-term economic incentives, individuals are likely to consider investing in protective measures that reduce the potential consequences of future catastrophic events.

Books