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Catastrophic risk, rare events, and black swans : could there be a countably additive synthesis?
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Hammond, Peter J. (2015) Catastrophic risk, rare events, and black swans : could there be a countably additive synthesis? Working Paper. Coventry: University of Warwick. Department of Economics. Warwick economics research papers series (TWERPS), Volume 2015 (Number 1060). (Unpublished)
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
Catastrophic risk, rare events, and black swans are phenomena that require special attention in normative decision theory. Several papers by Chichilnisky integrate them into a single framework with finitely additive subjective probabilities.
Some precursors include: (i) following Jones-Lee (1974), undefined
willingness to pay to avoid catastrophic risk; (ii) following R´enyi (1955, 1956) and many successors, rare events whose probability is infinitesimal. Also, when rationality is bounded, enlivened decision trees can represent a dynamic process involving successively unforeseen “true black swan” events. One conjectures that a different integrated framework could be developed to include these three phenomena while preserving countably additive probabilities.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | Q Science > QA Mathematics | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Catastrophes (Mathematics) | ||||
Series Name: | Warwick economics research papers series (TWERPS) | ||||
Publisher: | University of Warwick. Department of Economics | ||||
Place of Publication: | Coventry | ||||
Official Date: | 1 May 2015 | ||||
Dates: |
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Volume: | Volume 2015 | ||||
Number: | Number 1060 | ||||
Number of Pages: | 27 | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Unpublished | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Date of first compliant deposit: | 28 July 2016 | ||||
Date of first compliant Open Access: | 28 July 2016 | ||||
Funder: | European Commission (EC) | ||||
Grant number: | MEXC-CT-2006-041121 (EC) |
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