Risk Assessment: The Consumer as an Intuitive Statistician - Innovation and Marketing in the Pharmaceutical Industry - page 286

10.3 Chapter Outline and Goals

This chapter provides a broad and comprehensive overview of academic research on
risk assessment. There has been recent and growing academic interest in how con-
sumers assess health risk in both marketing (for a review, see Menon et al. 2008 )
and healthcare (for a review, see Hansen and Droege 2005 ).
Based on the two most commonly used managerial strategies for getting people
to accept risk (symptoms and base rates), we propose that consumers assess risk as
though they were intuitive statisticians using top-down and/or bottom-up methods,
but that these estimates of risk may be systematically biased, leading consumers to
frequently underestimate and occasionally overestimate their level of risk, both
associated with downstream costs to the individual, economy, and society. The
overall model is presented in Fig. 10.1 . The two methods, top-down and bottom-up,
rely on a different set of inputs to make judgments. Top-down methods rely on base
rates. Bottom-up methods rely on symptom identification and integration. Biases in
risk estimation creep in due to use of inappropriate inputs (e.g., base rates being
discounted or symptoms being ignored leading to underestimation of risk) and/or
the inappropriate integration of inputs. De-biasing strategies, accordingly, need to

Fig. 10.1 Overall theoretical model and chapter structure