Risk Analysis in Theory and Practice / Edition 1

by Jean-Paul Chavas

Overview

The objective of Risk Analysis in Theory and Practice is to present this analytical framework and to illustrate how it can be used in the investigation of 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 events affecting us? The complexities of our uncertain world and of how humans obtain and process information make this difficult. In spite of these difficulties, much progress has been made. First, probability theory is the corner stone of risk assessment. This allows us to measure risk in a fashion that can be communicated among decision makers or researchers. Second, risk preferences are now better understood. This provides useful insights into the economic rationality of decision making under uncertainty. Third, over the last decades, good insights have been developed about the value of information. This helps better understand the role of information in human decision making and this book provides a systematic treatment of these issues in the context of both private and public decisions under uncertainty.

Product Details

ISBN-13:	2900121706219
Publication date:	06/04/2004
Edition description:	New Edition
Pages:	247
Product dimensions:	6.00(w) x 1.25(h) x 9.00(d)

Table of Contents

Table of Content

Chapter 1: Introduction
Chapter 2: The Measurement of Risk
Chapter 3: The Expected Utility Model
Chapter 4: Risk Preferences
Chapter 5: Stochastic Dominance
Chapter 6: Mean-Variance Analysis
Chapter 7: Alternative Models of Risk Behavior
Chapter 8: Production Decisions under Risk
Chapter 9: Portfolio Selection
Chapter 10: Dynamic Decisions under Risk
Chapter 11: Contract and Policy Design under Risk
Chapter 12: Some Applications
Chapter 13: Market Stabilization
Appendix A: Probability and Statistics
Appendix B: Optimization

What People are Saying About This

From the Publisher

A concise and practical guide to risk measurement and decisions under uncertainty

Editorial Reviews

"Risk is at the very core of most decisions. This text beautifully explores the classical theory of choices under uncertainty including major applications and recent extensions. It combines usefulness, thoroughness, and clarity." —Christian Gollier, Professor of Economics, University of Toulouse

"Professor Chavas is one of the leading scholars in and premier teachers of applied risk analysis. This masterful book provides a rigorous, accessible and wide ranging treatment of the key concepts and tools. It is a "must read" for anyone seriously interested in the economics of risk, uncertainty and information." —Christopher B. Barrett, Professor, Department of Applied Economics and Management, Cornell University

From the Publisher