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jd_k comments on Rationality Quotes April 2014 - Less Wrong
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While this is true, it may also be the case that humans in the default state don't take enough risks. Indeed, an inventor or entrepreneur bears all the costs of bankruptcy but captures only some of the benefits of a new business. By classical economic logic, then, risk-taking is a public good, and undersupplied. Which said, admittedly, not all risk-taking is created equal.
That seems right, and it also seems as though the opposite is sometimes right. If a company knows it can reap the benefits of operations (e.g., of product sales) without bearing the cost of those risks associated with its operations (e.g., of pollution), is this a case of risk-taking being oversupplied?
Pollution does not seem particularly well described by risk or risk-taking; it basically a certainty with industrial operations.
In the same way that "product sales" was intended to refer to the result (income), "pollution" was intended to refer to the result (health problems, etc.). While one might think that some result is basically a certainty, the scope and degree of real problems is frequently uncertain. An entrepreneur who weighs potential public health risks does not seem any more difficult to imagine than one who weighs potential bankruptcy risks.
At any rate, pollution is merely an example; you can take any other example you find more suitable.