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The 'DICE' Model: Background and Structure of a Dynamic Integrated Climate-Economy Model of the Economics of Global Warming

Nordhaus, William D. - Cowles Foundation for Research in Economics, Yale University - 1992

This study is designed to present the methodological and technical assumptions and the results behind the Dynamic Integrated model of Climate and the Economy (the DICE model). It is a model that attempts to use the tools of modern economics to determine an efficient strategy for coping with the...

Persistent link: https://www.econbiz.de/10005593310

Rolling the 'Dice': An Optimal Transition Path for Controlling Greenhouse Gases

Nordhaus, William D. - Cowles Foundation for Research in Economics, Yale University - 1992

The possibility of greenhouse warming has received growing attention in recent years. Many scientific bodies are calling for severe curbs on the emissions of greenhouse gases. To date, the calls to arms and treaty negotiations have progressed more or less independently of economic studies of the...

Persistent link: https://www.econbiz.de/10005196053

Mean-Dispersion Preferences and Constant Absolute Uncertainty Aversion

Grant, Simon; Polak, Ben - Cowles Foundation for Research in Economics, Yale University - 2011

-by-state utility deviations from the mean, and rho(d) is a measure of (aversion to) dispersion that corresponds to an uncertainty … premium. The key feature of these mean-dispersion preferences is that they exhibit constant absolute uncertainty aversion … dispersion function rho(dot) correspond to known models, to probabilistic sophistication, and to some new notions of uncertainty …

Persistent link: https://www.econbiz.de/10009644449

Keynesian Utilities: Bulls and Bears

Bracha, Anat; Brown, Donald J. - Cowles Foundation for Research in Economics, Yale University - 2013

We propose Keynesian utilities as a new class of non-expected utility functions representing the preferences of investors for optimism, defined as the composition of the investor's preferences for risk and her preferences for ambiguity. The optimism or pessimism of Keynesian utilities is...

Persistent link: https://www.econbiz.de/10010895668

An Analysis of the Dismal Theorem

Nordhaus, William D. - Cowles Foundation for Research in Economics, Yale University - 2009

conditions concerning the structure of uncertainty and preferences, society has an indefinitely large expected loss from high …-making under uncertainty. However, the conditions necessary for the Dismal Theorem to hold are limited and do not apply to a wide …

Persistent link: https://www.econbiz.de/10005593631

Intergenerational Justice when Future Worlds Are Uncertain

Llavador, Humberto; Roemer, John E.; Silvestre, Joaquim - Cowles Foundation for Research in Economics, Yale University - 2009

under this kind of uncertainty, with preferences that satisfy the expected utility hypothesis. Various social welfare … ignore the uncertainty concerning the possible disappearance of the human species in the future. We conclude with some …

Persistent link: https://www.econbiz.de/10005196022

Decomposable Choice Under Uncertainty

Grant, Simon; Kajii, Atsushi; Polak, Ben - Cowles Foundation for Research in Economics, Yale University - 1999

Savage motivated his Sure Thing Principle by arguing that, whenever an act would be preferred if an event obtains and preferred if that event did not obtain, then it should be preferred overall. The idea that it should be possible to decompose and recompose decision problems in this way has...

Persistent link: https://www.econbiz.de/10004990721

Optimism and Pessimism with Expected Utility

Dillenberger, David; Postlewaite, Andrew; Rozen, Kareen - Cowles Foundation for Research in Economics, Yale University - 2011

pessimists and separate attitude towards uncertainty from curvature of the utility function over monetary prizes. …

Persistent link: https://www.econbiz.de/10009351465

Revealed Preferences for Risk and Ambiguity

Brown, Donald J.; Erdman, Chandra; Ling, Kirsten; … - Cowles Foundation for Research in Economics, Yale University - 2010

We replicate the essentials of the Huettel et al. (2006) experiment on choice under uncertainty with 30 Yale … is that we cannot reject the null hypothesis that risk and ambiguity are independent in economic choice under uncertainty …

Persistent link: https://www.econbiz.de/10008692925

Risky Curves: From Unobservable Utility to Observable Opportunity Sets

Friedman, Daniel; Sunder, Shyam - Cowles Foundation for Research in Economics, Yale University - 2011

Most theories of risky choice postulate that a decision maker maximizes the expectation of a Bernoulli (or utility or similar) function. We tour 60 years of empirical search and conclude that no such functions have yet been found that are useful for out-of-sample prediction. Nor do we find...

Persistent link: https://www.econbiz.de/10009251218