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Why Uncertainty Matters - Discounting under Intertemporal Risk Aversion and Ambiguity
Traeger, Christian - CESifo - 2012
Uncertainty has an almost negligible impact on project value in the economic standard model. I show that a comprehensive evaluation of uncertainty and uncertainty attitude changes this picture fundamentally. The analysis relies on the discount rate, which is the crucial determinant in balancing...
Persistent link: https://www.econbiz.de/10009645646
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Carbon Prices for the Next Thousand Years
Gerlagh, Reyer; Liski, Matti - CESifo - 2012
Climate is a persistent asset, bar none: changes in climate-related stocks have consequences spanning over centuries or possibly millennia to the future. To reconcile the discounting of such far-distant impacts and realism of the shorter-term decisions, we consider hyperbolic time-preferences in...
Persistent link: https://www.econbiz.de/10010554825
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Benefit-Cost Analysis of Environmental Projects: A Plethora of Systematic Biases
Graves, Philip E. - CESifo - 2010
There are many reasons to suspect that benefit-cost analysis applied to environmental policies will result in policy decisions that will reject those environmental policies. The important question, of course, is whether those rejections are based on proper science. The present paper explores...
Persistent link: https://www.econbiz.de/10008511597
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Carbon Prices for the Next Hundred Years
Gerlagh, Reyer; Liski, Matti - CESifo - 2014
World income grows fast without verifiable climate-change impacts on the economy. The growth spell can end if climate impacts turn real but this can take decades to learn. We develop a tractable stochastic climate-economy model with a hidden-state impact process to evaluate the contributions of...
Persistent link: https://www.econbiz.de/10010747216
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Public Investment as Commitment
Gerlagh, Reyer; Liski, Matti - CESifo - 2011
Should public assets such as infrastructure, education, and the environment earn the same return as private investments? We consider if time-inconsistent decision-makers can gain from institutions that enforce cost-benefit rules on large projects that influence the economy as a whole. Long-term...
Persistent link: https://www.econbiz.de/10008833880
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Combining Rights and Welfarism: A New Approach to Intertemporal Evaluation of Social Alternatives
Long, Ngo Van; Martinet, Vincent - CESifo - 2012
We propose a new criterion which reflects both the concern for welfare (utility) and the concern for rights in the evaluation of economic development paths. The concern for rights is captured by a pre-ordering over combinations of thresholds (floors or ceilings on various quantitative...
Persistent link: https://www.econbiz.de/10009651182
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Probability Adjusted Rank-Discounted Utilitarianism
Asheim, Geir B.; Zuber, Stéphane - CESifo - 2014
We propose and axiomatize probability adjusted rank-discounted critical-level generalized utilitarianism (PARDCLU). We … thus generalize rank-discounted utilitarianism (RDU) (proposed by Zuber and Asheim, 2012) to variable population and risky … other policy issues with long-run consequences. We illustrate how PARDCLU yields rank-dependent expected utilitarianism …
Persistent link: https://www.econbiz.de/10010756162
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Escaping the Repugnant Conclusion: Rank-Discounted Utilitarianism with Variable Population
Asheim, Geir B.; Zuber, Stéphane - CESifo - 2012
out the space between critical-level utilitarianism and (a version of) critical-level leximin. Moreover, it satisfies many …
Persistent link: https://www.econbiz.de/10010583638
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Justifying Social Discounting: The Rank-Discounted Utilitarian Approach
Zuber, Stéphane; Asheim, Geir B. - CESifo - 2010
utilitarianism on non-decreasing streams, but it treats all generations impartially: discounting becomes the mere expression of …
Persistent link: https://www.econbiz.de/10008671700
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Fair Intergenerational Utilitarianism: Risk, its Resolution over Time, and Discounting
Piacquadio, Paolo Giovanni - CESifo - 2014
The paper reexamines the welfare economics of intergenerational risk. Risk and its resolution over time are modeled as a decision tree: in each period, the consumption of the current one-period living generation is to be traded-off against uncertain benefits of future generations; as time...
Persistent link: https://www.econbiz.de/10011103396