Economic and Environmental Risk and Uncertainty

1. Front Matter

   Pages i-xii

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2. Models of Environmental Risk

   1. Front Matter

      Pages 1-1

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   2. Valuing Health and Safety: Some Economic and Psychological Issues

      • Michael Jones-Lee, Graham Loomes

      Pages 3-32

   3. Improving Efficiency in Environmental Enforcement

      • D. Marc Kilgour

      Pages 33-52

   4. Valuation of Environmental Goods

      • Fred Wenstøp, Arne J. Carlsen

      Pages 53-64

   5. Stochastic Trees and Medical Decision Making

      • Gordon B. Hazen, Jayavel Sounderpandian

      Pages 65-74

   6. Manipulation of Emission Permit Markets

      • E. Romstad, O. Bergland

      Pages 75-86

3. Risk and Uncertainty in Economic Theory

   1. Front Matter

      Pages 87-87

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   2. Allais Theory Offers Explanation for Equity Premium Puzzle

      • John E. Golob

      Pages 89-108

   3. Generalized Expected Utility and the Demand for Insurance

      • Thomas Russell

      Pages 109-114

   4. The Derivation of Generalized Expected Utility Expansions

      • Mark J. Machina

      Pages 115-122

   5. Necessary Conditions for Efficient Multiple-Bid Auctions

      • Friedel Bolle

      Pages 123-143

   6. Balanced Equilibrium

      • M. Mariotti

      Pages 145-161

   7. Mixed Extensions of Games and the Saint Petersburg Paradox

      • H. H. Haller

      Pages 163-171

   8. Consumption with Fluctuations in Preference

      • Koju Nakazawa, John D. Hey

      Pages 173-192

4. Recent Progess in Modeling Preferences and Risk Attitudes

   1. Front Matter

      Pages 193-193

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   2. Dynamically Consistent Preferences, Quadratic Beliefs, and Choice Under Uncertainty

      • Jürgen Eichberger, Simon Grant

      Pages 195-205

   3. Induced Preferences and Decision-Making under Risk and Uncertainty

      • David Kelsey, Frank Milne

      Pages 207-217

   4. On Socks, Ties and Extended Outcomes

      • Harry M. Markowitz

      Pages 219-226

   5. Hierarchies and the Self-Control of Risk Attitude

      • Luc Wathieu

      Pages 227-243

The 1980s and 1990s have been a period of exciting new developments in the modelling of decision-making under risk and uncertainty. Extensions of the theory of expected utility and alternative theories of `non-expected utility' have been devised to explain many puzzles and paradoxes of individual and collective choice behaviour. This volume presents some of the best recent work on the modelling of risk and uncertainty, with applications to problems in environmental policy, public health, economics and finance. Eighteen papers by distinguished economists, management scientists, and statisticians shed new light on phenomena such as the Allais and St. Petersburg paradoxes, the equity premium puzzle, the demand for insurance, the valuation of public health and safety, and environmental goods.
Audience: This work will be of interest to economists, management scientists, risk and policy analysts, and others who study risky decision-making in economic and environmental contexts.

• decision making
• economics
• efficiency
• environment
• environmental policy
• equilibrium
• modeling
• valuation

• Fuqua School of Business, Duke University, Durham, USA

  Robert Nau

• Department of Business Economics, Norwegian School of Management, Sandvika, Norway

  Erik Grønn

• Department of Economics, University of California at San Diego, La Jolla, USA

  Mark Machina

• Department of Economics and Social Sciences, Agricultural University of Norway, Aas, Norway

  Olvar Bergland

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