Humans Fail to Plan for Catastrophe

Bruce’s blog today pointed me to a blog post by In Case of Emergency that says an earthquake simulation game shows how humans are bad at planning for disasters. The story is that players choose to invest their money to make interest instead of spending on their own safety.

This led me to the Wharton Magazine article “Masters of Disaster” that discusses the game.

At Wharton’s Risk Management and Decision Processes Center, researchers are investigating why humans do such a poor job planning for, and learning from, catastrophes.

Unless I read the article incorrectly it actually profiles just the behavior of students at Wharton.

Kunreuther, the Cecilia Yen Koo Professor, and Meyer have run the Quake simulation for the past four years, using students in Kunreuther’s Risk Analysis and Environmental Management class as the guinea pigs/gamers. By now, about 500 students have played the game, and every time, they play it essentially the same way.

Is it really a surprise that a group of MBA students at Wharton always “destroys themselves” for profit in a game? Aside from the fact that games induce far riskier behavior because the penalties are fake (ever die playing Grand Theft Auto, or been kicked off stage in Guitar Hero?) students in a program to learn how to maximize profit are likely to be more profit-driven when facing risk than the general population.

I’m not saying it’s obviously a get-rich-or-die-trying culture there, or they need to re-evaluate their admissions process, but it also is not a fair sample and should not be extrapolated too far. I would wager a more general population that represents people outside this group at Wharton would give different results.

Other research, such as the Survival study reported in LiveScience, suggests there is actually diversity in how people think about survival:

To test their idea that mixed groups would benefit survival, Ein-Dor and his colleagues put students in groups of threes alone in a room with a concealed smoke machine, which was switched on to simulate a fire. Groups were quicker to notice the smoke and to react to it if they contained individuals who scored high for insecure attachment.

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