The Social Discount Rate Under Intertemporal Risk Aversion and Ambiguity
نویسندگان
چکیده
منابع مشابه
The Social Discount Rate under Intertemporal Risk Aversion and Ambiguity
Following the Stern review of climate change the numerical choice of the social discount rate has been identified as one of the most crucial determinants of optimal policy recommendations for greenhouse gas mitigation policies. In this paper I point out two closely related contributions to the social discount rate in an uncertain world that have been overlooked in the debate. First, the standar...
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Two central concerns in the sustainability debate are the weight given to the needs of future generations and the application of the precautionary principle. In an economic model, these aspects of intertemporal evaluation can be mapped into time preference and intertemporal risk aversion. The current analysis points out a close link between these different aspects of intertemporal evaluation fr...
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Under which condition does the set of desirable uncertain prospects expand when wealth increases? We show that the decreasing concavity (DC) of the utility function is necessary and sufficient in the −maxmin expected utility model. In the smooth ambiguity aversion model with the ambiguity valuation function , the DC of and of ◦ is necessary and sufficient. An alternative definition of d...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2008
ISSN: 1556-5068
DOI: 10.2139/ssrn.1898098