Ep28 Incentives and Externalities
All Else Equal: Making Better Decisions
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The Effect of Externality on Decision-Making
There's a difference between what they estimate and what they communicate, indeed. So how many times does it need to happen in their calculation for them to announce it as a severe weather event every time? Maybe 20% they find is enough. But I do think that if it only truly happens one in every five times, it's going to have this wearing out effect on the people that received this news. Yes, and they don't take that into account. In other words, their view is one in five. My God, that's a big number. Can you imagine we missed one in five storms? Yeah. If you look at it that way, it's hard to argue. The
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