Global environmental phenomena like climate change, major extinction events or flutype pandemics can have catastrophic consequences. By properly assessing the outcomes involved – especially those concerning human life – economic theory of choice under uncertainty is expected to help people...

The linear plus exponential utility function has received increasing attention of late as a particularly attractive family for evaluating additive gambles for wealth. In addition to its ability to reflect increasing appreciation for money, risk aversion, and decreasing risk aversion, it is...

This paper presents the results of a contingent valuation in France of the life expectancy gain due to a reduction of air pollution. A questionnaire developed by Krupnick at al. [2002] for North America was translated and administered to 300 individuals aged 40 to 75, but by contrast to the...

We report an experimental test of the four touchstones of rationality in choice under risk – utility maximization, stochastic dominance, expected-utility maximization and small-stakes risk neutrality – with students from one of the best universities in the United States and one of the best...

Climate change involves uncertain probabilities of catastrophic risks, and very longterm consequences of current actions. Climate economics, therefore, is centrally concerned with the treatment of risk and time. Yet conventional assumptions about utility and optimal economic growth create a...

First, we investigate which type of the liability law that protects nuclear power plants against catastrophe is socially optimal. We show that when a firm with a few funds is managed under the strict liability, maximization of social welfare is impossible since the firm may not cope with the...