Scope insensitivity: The limits of intuitive valuation of human lives in public policy

Abstract

A critical question for government officials, managers of NGOs, and politicians is how to respond to situations in which large numbers of lives are at risk. Theories in judgment and decision making as well as economics suggest diminishing marginal utility with increasing quantities of goods. In the domain of lifesaving, this form of non-linearity implies decreasing concern for individual lives as the number of affected people increases. In this paper, we show how intuitive valuations based on prosocial emotions can lead to scope insensitivity and suboptimal responses to lives at risk. We present both normative and descriptive models of valuations of lives and discuss the underlying psychological processes as they relate to judgments and decisions made in public policy and by NGOs.