A Precautionary Tale of Uncertain Tail Fattening
Suppose that there is a probability density function for how bad things might get, but that the overall rate at which this probability density function slims down to approach zero in the tail is uncertain. The paper shows how a basic precautionary principle of tail fattening could then apply. The worse is the contemplated damage, the more should a decision maker consider the bad tail to be among the relatively fatter-tailed possibilities. A rough numerical example is applied to the uncertain tail distribution of climate sensitivity.
Year of publication: |
2013
|
---|---|
Authors: | Weitzman, Martin L. |
Institutions: | Department of Economics, Harvard University |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Economic Profitability Versus Ecological Entropy
Weitzman, Martin L., (2000)
-
On Modeling and Interpreting the Economics of Catastrophic Climate Change
Weitzman, Martin L., (2009)
-
Pricing the Limits to Growth from Minerals Depletion
Weitzman, Martin L., (1999)
- More ...