Findings from E. Lermer and Co-Researchers in the Area of Risk Management Reported (Thinking Concretely Increases the Perceived Likelihood of Risks:…

Findings from E. Lermer and Co-Researchers in the Area of Risk Management Reported (Thinking Concretely Increases the Perceived Likelihood of Risks: The Effect of Construal Level on Risk Estimation)

By a News Reporter-Staff News Editor at Insurance Weekly News -- Investigators publish new report on Risk Management. According to news reporting from Munich, Germany, by VerticalNews journalists, research stated, "Recent findings on construal level theory (CLT) suggest that abstract thinking leads to a lower estimated probability of an event occurring compared to concrete thinking. We applied this idea to the risk context and explored the influence of construal level (CL) on the overestimation of small and underestimation of large probabilities for risk estimates concerning a vague target person (Study 1 and Study 3) and personal risk estimates (Study 2)."

The news correspondents obtained a quote from the research, "We were specifically interested in whether the often-found overestimation of small probabilities could be reduced with abstract thinking, and the often-found underestimation of large probabilities was reduced with concrete thinking. The results showed that CL influenced risk estimates. In particular, a concrete mindset led to higher risk estimates compared to an abstract mindset for several adverse events, including events with small and large probabilities. This suggests that CL manipulation can indeed be used for improving the accuracy of lay people's estimates of small and large probabilities. Moreover, the results suggest that professional risk managers' risk estimates of common events (thus with a relatively high probability) could be improved by adopting a concrete mindset. However, the abstract manipulation did not lead managers to estimate extremely unlikely events more accurately."

According to the news reporters, the research concluded: "Potential reasons for different CL manipulation effects on risk estimates' accuracy between lay people and risk managers are discussed."

For more information on this research see: Thinking Concretely Increases the Perceived Likelihood of Risks: The Effect of Construal Level on Risk Estimation. Risk Analysis, 2016;36(3):623-637. Risk Analysis can be contacted at: Wiley-Blackwell, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - www.wiley.com/; Risk Analysis - onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6924)

Our news journalists report that additional information may be obtained by contacting E. Lermer, Munich Re, Koniginstr 107, D-80802 Munich, Germany. Additional authors for this research include B. Streicher, R. Sachs, M. Raue and D. Frey.

Keywords for this news article include: Munich, Europe, Germany, Risk Management

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