Risk Compensation (Peltzman Effect)
We take more risks when we feel protected by safety measures, offsetting their benefit.
Risk compensation (also called the Peltzman effect, after economist Sam Peltzman) is a theory that people typically adjust their behavior in response to the perceived level of risk, becoming more careful where they sense greater risk and less careful if they feel more protected. Mandatory seat belt laws may lead drivers to drive faster, partially offsetting the safety benefit. Helmets may encourage cyclists to take more risks.
What it looks like in the wild.
- Everyday life Helmet Risk-Taking Studies found that cyclists wearing helmets cycle closer to cars and take more risks, potentially offsetting some of the protective benefit the helmet provides.
Recognising a definition is not the same skill as spotting it.
Two scenarios from the app, with distractors drawn from the same family of biases — which is what makes them hard.
Tom received a raise and a more secure job contract. He began investing a larger portion of his salary in high-risk stocks, feeling his job stability would cushion any losses.
Lisa bought a waterproof phone case. She started taking her phone to the beach and pool without extra caution, believing it was fully protected from water damage.
Biases rarely arrive alone.
Understand more. Assume less.
188 biases, 18,869 scenarios, and a record of how you actually decide.
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