Summary |
Risk analysis in theory and practice presents an analytical framework and illustrates how to use it to investigate economic decisions under risk. In a sense, the economics of risk is a difficult subject: it involves understanding human decisions in the absence of perfect information. How do we make decisions when we do not know some of the events affecting us? The complexities of our uncertain world and of how humans obtain and process information make understanding difficult. In spite of these challenges, much progress has been made.
Jean-Paul Chavas provides a systematic treatment of both private and public decisions under uncertainty, taking into consideration crucial factors including risk assessment using probability theory, risk measurement, risk preferences, and new insights into the value of information.
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