We specify a stochastic economy-climate model, adapting Nordhaus' deterministic economy-climate model by allowing for Weitzman-type stochasticity. We show that, under expected power utility, the model is fragile to heavy-tailed distributional assumptions and we derive necessary and sufficient...

Dagsvik (2008) has recently extended Debreu's (1958) famous representation theorem for stochastic choice to the domain of lotteries. Dagsvik provides conditions under which there exists a linear utility function such that the probabilityof choosing one alternative over another is represented by...