Sunday, May 17, 2009

People become more reckless when they feel safe.

I was reading a nice article on how more safe feeling can be cause of more trouble. Its humane to be less vigilant when we feel its all secure.

Lets study road safety. We remain less focused on road when you feel its safe. People tend to divert attention to cellphones, music, ipods while driving and check traffic less frequently. This can cause major accidents. On the other hand if you are through narrow roads or heavy traffic you pay more attention to raod and become vigilant.

Next lets take traffic lights. We all take traffic signals for granted and assume they will work properly. Studies have shown that when traffic lights are converted to stop sign drivers pay more attention to the road. Traditional square intersection with lights are considered less safe then roundabout circular intersection. Driver talk to other drivers by hand and eye contacts more on such circular intersections. It has added bonus of no traffic lights and no maintenace of lights.
With auto insurance and home insurances in market, people tend to accept greater risk.
Financial markets have shown similar tendency. With insurance on losses, market fall, credits financial institution have shown tendency to invest money in high risk areas and seem to have lost.

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