Risk Analysis and Decision Theory: Foundations

Emanuele Borgonovo, Veronica Cappelli, Fabio Maccheroni and Massimo Marinacci

No 556, Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University

Abstract: The triplet-based risk analysis of Kaplan and Garrick (1981) is the keystone of state-of-the-art probabilistic risk assesment in several applied fields. This paper performs a sharp embedding of the elements of this framework into the one of formal decision theory, which is mainly concerned with the methodological and modelling issues of rational decision making. In order to show the applicability of such an embedding, we also explicitly develop it within a nuclear probabilistic risk assessment, as prescribed by the U.S. NRC. The aim of this exercise is twofold: on the one hand, it gives risk analysis a direct access to the rich toolbox that decision theory has developed, in the last decades, in order to deal with complex layers of uncertainty; on the other, it exposes decision theory to the challenges of risk analysis, thus providing it with broader scope and new stimuli.

Date: 2015
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://repec.unibocconi.it/igier/igi/wp/2015/556.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:igi:igierp:556

Ordering information: This working paper can be ordered from
https://repec.unibocconi.it/igier/igi/

Access Statistics for this paper

More papers in Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University via Rontgen, 1 - 20136 Milano (Italy).
Bibliographic data for series maintained by ().