A Decision-Process Perspective on Risk and Policy Analysis

Howard Kunreuther, Joanne Linnerooth and James W. Vaupel
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Howard Kunreuther: The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104
Joanne Linnerooth: International Institute for Applied Systems Analysis, Laxenburg, Austria
James W. Vaupel: Institute of Policy Sciences and Public Affairs, Duke University, Durham, North Carolina 27706

Management Science, 1984, vol. 30, issue 4, 475-485

Abstract: Risk analysis and policy analysis can play important roles in facilitating the siting of potentially hazardous facilities if one recognizes the descriptive features of the decision process. The case of siting a liquified natural gas (LNG) facility in California illustrates the multi-party sequential nature of the process and the role that widely differing risk estimates play in fueling conflicts between stakeholders. Risk analysis does have a useful function in clarifying the nature of the potential losses, particularly if rules of evidence are instituted for evaluating different studies. Policy analysis can facilitate the negotiation process by the use of compensation to redistribute gains and losses between the different parties. Examples from case studies are presented to illustrate the challenges for risk analysis and policy analysis in the siting process.

Keywords: risk analysis; policy analysis; decision process; low probability event (search for similar items in EconPapers)
Date: 1984
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:30:y:1984:i:4:p:475-485

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