We revisit Machina's local utility as a tool to analyze attitudes to multivariate risks. Using martingale embedding techniques, we show that for non-expected utility maximizers choosing between multivariate prospects, aversion to multivariate mean preserving increases in risk is equivalent to...

In this paper we introduce a tractable social welfare function that is rich enough to disentangle preferences towards risk in health outcomes from preferences towards health inequalities across individuals. Given this preference specification we evaluate how uncertainty over the severity of...

The choice of the proper discount rate is important in the analysis of projects whose costs and benefits extend into the future, a particularly striking feature of policies directed at climate change. Much of the literature, including prominent work by Arrow et al. (1996), Stern (2007, 2008),...

Assessment of climate change policies requires aggregation of costs and benefits over time and across generations, a process ordinarily done through discounting. Choosing the correct discount rate has proved controversial and highly consequential. To clarify past analysis and guide future work,...

Can courts cause dramatic policy change? And if courts can, are there institutional features of courts and/or conditions under which they operate that make them particularly able and likely to change policy dramatically? Public law scholars would generally answer “no” to the first question,...

Why do lawyers in some jurisdictions continue to ‘automatically’ exclude the 1980 UN Convention on Contracts for the International Sale of Goods (CISG) in their choices of law for international sales contracts? Why do lawyers in other jurisdictions approach the decision very differently? Why...

As Hurricane Katrina vividly revealed, disaster policy in the United States is broken and needs reform. What can we learn from past disasters - storms, floods, earthquakes, tsunamis, landslides, and wildfires - about preparing for and responding to future catastrophes? How can these lessons be...

Traditional economic theory assumes individuals to be entirely rational actors who are solely maximizing their own utility. However, various experimental studies show that individuals do not necessarily conform to the behavioral assumption of Homo economicus. Many subjects do not solely focus on...

This article shows how contracts are the institutional foundation of a market economy. Contracts create wealth, allocate risk and are based on consent. There is no perfect competition and the markets are characterized by a number of failures; therefore, contracts are not perfect. However, the...