Behavioural Economics of Security
For years, the field of behavioural psychology has shaped the understanding of human behaviour. More and more findings of that discipline are also applied in economics. However, potential implications for the specific area of economics of security have been widely ignored. This paper transfers empirically proven phenomena of behavioural psychology, such as decision heuristics and fallacies, to the economics of security. In particular, we will focus on the subjective perception of risks and its implications on the evaluation of security solutions. Our paper provides an overview on aspects of behavioural psychology in economics of security. We argue that findings from behavioural psychology bear the potential to influence the assessment of security measures, and therefore need to be clearly identified for ensuring the efficient allocation of limited budgets for security solutions. In our view, sensitising decision-makers in the field of security for aspects of behavioural psychology is useful and conducive to enhance the management of risks for public security.
KeywordsEconomics of security Economics of safety Behavioural psychology Efficient risk management
The author would like to thank Florian Schneider for excellent research assistance and the anonymous reviewer for very valuable and helpful comments.
This research was funded in the context of the support guidelines ’New Economic Aspects’ of the Federal Ministry of Education and Research within the framework of the program ’Research for Civil Security' of the German Federal Government.
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