Magnus, Jan R.; Ikefuji, M.; Laeven, R.J.A.; Muris, C.H.M. - Tilburg University, Center for Economic Research - 2010
In the context of extreme climate change, we ask how to conduct expected utility analysis in the presence of catastrophic risks. Economists typically model decision making under risk and uncertainty by expected util- ity with constant relative risk aversion (power utility); statisticians typi-...