Precautionary Effect and Variations of the Value of Information

Laurent Gilotte and Michel de Lara
Additional contact information
Laurent Gilotte: CIRED
Michel de Lara: CERMICS

No 2005.28, Working Papers from Fondazione Eni Enrico Mattei

Abstract: For a sequential, two-period decision problem with uncertainty and under broad conditions (non-finite sample set, endogenous risk, active learning and stochastic dynamics), a general sufficient condition is provided to compare the optimal initial decisions with or without information arrival in the second period. More generally the condition enables the comparison of optimal decisions related to different information structures. It also ties together and clarifies many conditions for the so-called irreversibility effect that are scattered in the environmental economics literature. A numerical illustration with an integrated assessment model of climate-change economics is provided.

Keywords: Value of Information; Uncertainty; Irreversibility effect; Climate change (search for similar items in EconPapers)
JEL-codes: D62 D63 H23 Q29 (search for similar items in EconPapers)
Date: 2005-02
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://feem-media.s3.eu-central-1.amazonaws.com/w ... oads/NDL2005-028.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2005.28

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by Alberto Prina Cerai ( this e-mail address is bad, please contact ).