Decision‐Making, Time Horizons, and Risk in the Very Long‐Term Perspective

Ola Svenson and Gunnar Karlsson

Risk Analysis, 1989, vol. 9, issue 3, 385-399

Abstract: Some decisions made today have far‐reaching consequences as exemplified by those concerning nuclear power and spent nuclear fuel. The investigation presented here uses a decision theoretic framework in which time horizons and the discounting of negative consequences play significant roles. The results indicated wide variations in the lengths of the planning horizons judged to be adequate not only across a number of activities, including nuclear waste management, but also across groups of subjects (e.g., engineering students, retired people, and nuclear fuel experts). The paper reports typical judgments and correlations between different variables for different groups of subjects. The differences across groups reflect potential sources of conflict, depending in part on different values and different perceptions of more or less uncertain facts. Discounting functions for negative consequences in the future were also established. A range in differences in the speed of discounting were found and illustrated. Furthermore, it was found that substantial proportions in all groups regarded negative consequences related to nuclear waste as nondiscountable. When asked about the effect of time until outcome on acceptable probability of a negative outcome, many subjects used the probability concept in an incoherent way, illustrating the great difficulty in communicating small probabilities in a long‐term risk context.

Date: 1989
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https://doi.org/10.1111/j.1539-6924.1989.tb01004.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:9:y:1989:i:3:p:385-399

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