RISK AND THE VALUE OF INFORMATION IN IRREVERSIBLE DECISIONS

The analysis of the nexus between the value of information and risk is examined for sequential decisions with different degrees of future commitment, as e.g. environmental decisions. We find that in the linear case a riskier environment in general will increase the value of information. This result will be extended in the separable case to decreasing and increasing stochastic returns to scale. An example shows the ambiguity in the general case.     

The implications of irreversibility in emergency response decisions

The irreversibility effect implies that a decision maker who neglects the prospect of receiving more complete information at later stages of a sequential decision problem will in certain cases too easily take an irreversible decision, as he ignores the existence of a positive option value in favour of reversible decisions. This option value represents the decision maker's flexibility to adapt subsequent decisions to the obtained information. In this paper we show that the economic models dealing with irreversibility as used in environmental and capital investment decision making can be extended to emergency response decisions that produce important irreversible effects. In particular, we concentrate on the decision whether or not to evacuate an industrial area threatened by a possible nuclear accident. We show in a simple two-period evacuation decision model that non-optimal conclusions may be drawn when evacuation is regarded as a `now or never decision'. The robustness of these results is verified by means of a sensitivity analysis of the various model parameters. The importance of `options thinking' in this decision context is illustrated in an example.     

不可逆性与区域可持续发展

人与自然的和谐,就是要协调社会经济发展与自然资源利用以及生态环境三者的关系,本质上是可持续发展问题。当前环境资源的稀缺性和生产过程的不可逆性成为导致人与自然矛盾冲突的根源,因此,根据资源承载力和环境容量进行适度的经济活动,才能实现区域资源的永续利用和区域的可持续发展。