Risk diversification sustains private adoption

Why do people keep using a practical routine after its public popularity fades? This proposed mechanism says a second routine can serve as insurance when its successes and failures differ from those of a familiar routine. A test would keep average payoffs, effort and exposure history constant, then vary how closely the two routines’ outcomes move together. Private adoption should rise when they hedge each other. Transparent loss insurance, compared with an equally valued fixed payment, should shrink that difference.