The limits of catastrophe aversion
2002 (English)In: Risk Analysis, ISSN 0272-4332, E-ISSN 1539-6924, Vol. 22, no 3, 527-538 p.Article in journal (Refereed) Published
We discuss the management of catastrophe-risks from a theoretical point of view. The concept of a catastrophe is informally and formally defined, and a number of desiderata for catastrophe-averse decision rules are introduced. However, the proposed desiderata turn out to be mutually inconsistent. As a consequence of this result, it is argued that the "rigid" form of catastrophe aversion articulated by, for example, the maximin rule, the maximum probable loss rule, (some versions of) the precautionary principle, and the rule proposed in Ekenberg et al. (1997, 2000) should be given up. An alternative form of "non-rigid" catastrophe aversion is considered.
Place, publisher, year, edition, pages
2002. Vol. 22, no 3, 527-538 p.
IdentifiersURN: urn:nbn:se:kth:diva-13604DOI: 10.1111/0272-4332.00036ISI: 000176547800016OAI: oai:DiVA.org:kth-13604DiVA: diva2:326163
QC 201006222010-06-222010-06-222012-06-11Bibliographically approved