Understanding Food Scares: The Role of Ambiguity Aversion and Analogical Reasoning

Why do individuals exhibit similar reactions to manifestly different food scares? This article examines the hypothesis of analogical reasoning, a cognitive shortcut whereby individuals anchor their risk judgements in other similar previous risky events present in their memories explains together with known determinants of risks perceptions such as risk attitudes and ambiguity aversion. Considering the distribution of risk perceptions related to three food scares that people in Europe remember, namely dioxins, genetically modified food (GMF), and bovine spongiform encephalopathy (BSE). Furthermore, the article explores whether intrinsic individual attitudes toward risk (risk aversion) or a common human reaction to lack of information, namely ambiguity aversion, are associated with perceptions of risk. The findings suggest that perceptions of the three food scares appear to be statically distributed in almost the same way, consistently with the presence of analogical reasoning. Results show that although risk perceptions were affected by a degree of ambiguity aversion, the intensity of risk perceptions is mainly explained by individual-specific risk attitudes.