This hits the nail right on the head. My basic assumptions have been challenged and I am not handling it at all well.
If you're coming round to the idea that risk compensation is not ridiculous then you're handling it very well, it seems to me that people who change their mind in the light of evidence are a rare breed.
I think risk compensation is better explained by turning it on it's head: do you take more
care when you see more
danger? I think that most people would regard it as self-evident that more danger makes people more careful, and that the purpose of being careful is to mitigate the risk, but you can't have it both ways: if you're being more careful when there's more danger you must be being less careful when there less danger.
As people have pointed out though, it doesn't have to be a conscious decision, psychology textbooks are full of experiments that demonstrate bizarre things that people do without being aware of it.Here's
another example of risk compensation: people drive faster, and closer to the car in front when they wear a seatbelt, thus nobody has been able to demonstrate that seatbelt legislation leads to a lower fatality rate on the roads. Fewer fatalities among car occupants is offset by an increase in deaths among pedestrians and cyclists as motorists drive less carefully. Like for the Bolton Councillor and his son, this is particularly uncomfortable for me personally, because I would have died on 9.11.85 if I hadn't been wearing my seatbelt when I crashed head-on into a lorry. The point is that proving that Axel Knutt's life was saved by a seatbelt is not the same as proving that seatbelts have reduced total road fatalities, and it's the job of government to legislate for the benefit of society as a whole, not me personally.
If you want a text on risk compensation John Adams' Risk
is an excellent read.