‘Risk’ has become a central theme in 21st-century policy thinking. The fact that individuals and families are vulnerable to a wide range of social, economic and other risks, and that collective action is needed to help reduce and manage these risks, has long been important in social...

Questions relating to the allocation and management of risk have played a central role in the development of the National Water Initiative, particularly as it has applied to the Murray-Darling Basin. The central issues of efficiency and equity in allocations are best understood by considering...

Dual approaches have proved their value in many areas of economic analysis. Until recently, however, they have been virtually ignored in the analysis of choice under uncertainty.In this paper, we present a dual formulation of choice under uncertainty based on a few simple assumptions about...

This paper has two goals. First, we demonstrate that standard arguments and methods from production and duality analysis can be used to provide a comprehensive and general treatment of the value of information for a risk-averse firm with expected-utility (linear-in-probabilities) preferences and...

In the past year, climate change has moved from political controversy to political consensus; at least, in relation for price-based policies the need to limit emissions. Uncertainties remain but with both major parties proposing to develop an emissions trading regime, it is timely to highlight...

We consider an asset market traded three types of assets: the risk–free asset, the market portfolio and derivatives written on the market portfolio return. We determine a sufficient condition to guarantee that noise risk monotonically changes their derivatives. The condition is that...

We present a definition of increasing uncertainty, in which an elementary increase in the uncertainty of any act corresponds to the addition of an `elementary bet' that increases consumption by a fixed amount in (relatively) `good' states and decreases consumption by a fixed (and possibly...

Abstract. We define and discuss Savage games, which are ordinal games that are set in L. J. Savage’s framework of purely subjective uncertainty. Every Bayesian game is ordinally equivalent to a Savage game. However, Savage games are free of priors, prob- abilities and payoffs. Players’...

Quiggin and Chambers have introduced the notion of invariant preferences, and shown that the only invariant expected-utility functionals are those associated with a quadratic utility function. This note identifies the class of preferences which simultaneously satisfy invariance, two-fund...

In this chapter, we compare the experience of Australia and New Zealand over the period of microeconomic reform that began in the early 1980s. Of particular concern is the question of how New Zealand, with what were seen at the time as the ‘best’ set of economic policies in the OECD,...