458. W. Kip Viscusi and Richard J. Zeckhauser, Hindsight-Choice Bias in Combating Terrorism, 02/2004; subsquently published as "Recollection Bias and the Combat of Terrorism" in Journal of Legal Studies, Vol. 34, January 2005, 27-55.
Abstract: Survey respondents assessed the risks of terrorist attacks and their consequences, and were asked how their assessments changed after 9/11/2001. This paper analyzes those risk assessments, and then uses respondents' patterns of risk assessments to explain their willingness to sacrifice civil liberties to combat terrorism.
More than half of the respondents exhibited hindsight bias; i.e., reported that risk assessments did not rise after 9/11. Estimates should have risen given that a major attack was an event with a low and highly uncertain probability. Equivalent numbers showed hindsight bias surrounding space shuttle risks and the Challenger accident.
There is general willingness to support airplane passenger profiling if the time costs of alternative policies are great, and there is support for surveillance policies to address terrorism risks as well. However, individuals suffering from hindsight bias are much less supportive. Interestingly, people exhibiting hindsight bias with respect to space shuttle accidents are also less supportive of these anti-terrorism policies. We explain these results as the phenomenon we label hindsight-choice bias: People assessing past decisions in which they are invested -- such as the protective decisions the government made on behalf of its citizens - do not favor a change in policy after an unlikely event if they believe their risk estimates have not changed. Despite claiming that risks were not above their pre-9/11 levels, individuals exhibiting hindsight-choice bias do not have significantly lower terrorism risk beliefs than others. Yet, they are less supportive of anti-terrorism policies, which is consistent with continuing to favor policies that were previously desirable.