Risks and weak aggregation: Why different models of risk suit different types of cases

Abstract

Discussions of risk have assumed that risk must be modeled the same in all cases. This is a mistake. Normally, if people know that those affected by an agent’s choice have conflicting interests, the ex post model should be used. But when the claims of all affected people either align or come close enough to aligning that one group with conflicting claims should waive them for the sake of others, then the ex ante model should be used. Social policy makers may use neither if they are simply affirming that individual choices are permissible.