The Limits of Catastrophe Aversion

Martin Peterson

Risk Analysis, 2002, vol. 22, issue 3, 527-538

Abstract: 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.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1111/0272-4332.00036

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:wly:riskan:v:22:y:2002:i:3:p:527-538

Access Statistics for this article

More articles in Risk Analysis from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().