How do people make decisions about risky situations?

Living at the foot of one of the world’ s most active volcanoes might not appeal to you at all. But believe it or not, the area surrounding Mount Etna in Italy is packed with people. In fact, it is the most densely populated region on the whole island of Sicily. The reason is that rich volcanic soil makes the land fantastic for farming. By growing and selling a variety of crops, local people earn a good living. For them, the economic benefit they reap surpasses the risk of dying or losing property in one of the volcano’s frequent eruptions. People everywhere make decisions about risky situations this way. That is, by comparing the risks and the benefits. According to the experts, the side of the risk depends on both its probability and seriousness. Let’s take Mount Etna for example, It does erupt frequently, but those eruptions are usually minor. So the overall risk for people living nearby is relatively small. But suppose Mount Etna erupted everyday, or imagine that each eruption there kills thousands of people. If that were the case, the risk would be much larger. Indeed, the risk would be too large for many people to live with. And they would have to move away.