Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [154]
3 For simplicity, Figure 24.1 depicts the variances as seemingly the same. Of course, we would also be unsure about all moments.
4 “The Economics of Climate Change,” Stern Review, ch. 1. The science behind this hinges on the interaction of three main effects—ocean surface temperatures, vertical wind shear, and atmospheric humidity—but these may not all act in the same direction. For example, while higher water temperatures and higher humidity can increase the intensity of cyclones, increased vertical shear may tend to destroy the vortex and thereby break up the storms. See “Hurricanes in a Warmer World,” Union of Concerned Scientists (2006).
5 This is a tricky issue. Paul Samuelson’s well-known paper (“Risk and Uncertainty: A Fallacy of the Law of Large Numbers,” Scientia, April/May 1963) urges caution regarding the pitfalls in repeated gambles and the issue of how far risk can be diversified through inter-temporal mechanisms.
6 Dwight Jaffee, Howard Kunreuther, and Erwann Michel-Kerjan, “Long-Term Insurance for Addressing Catastrophe Risk,” Working Paper # 14210, National Bureau of Economic Research (2008). Insurers can “insure” the premium risk for their policyholders by offering premiums that do not vary over time, or at least do not vary annually according to changes in the estimated level of risk.
7 Karl Borch, “Equilibrium in a Reinsurance Market,” Econometrica 30, no. 3. (1962): 424-444. See also Georges Dionne and Neil Doherty, “Insurance with Undiversifiable Risk: Contract Structure and Organizational Form of Insurance Firms,” Journal of Risk and Uncertainty 6 (1993): 187-203.
Chapter 25 Linnerooth-Bayer: International Social Protection in the Face of Climate Change
1 Shu Zukang, p. xxiv.
2 Decision 1/CP.13, Bali Action Plan (www.unfccc.int/files/meetings/cop_13/application/pdf/cp_bali_action.pdf ).
3 S. Solomon et al., “Technical Summary,” in S. Solomon, D. Qin, M. Manning, Z. Chen, M. Marquis, K. B. Averyt, M. Tignor, and H. L. Miller, eds., Climate Change 2007: The Physical Science Basis (Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge University Press, Cambridge).
4 Food and Agriculture Organization (FAO), “Public Assistance and Agricultural Development in Africa,” twenty-first FAO regional conference for Africa, Yaounde, Cameroon.
5 J. R. Skees, B. J. Barnett, and A. G. Murphy, “Creating Insurance Markets for Natural Disaster Risk in Lower-Income Countries: The Potential Role for Securitization,” Agricultural Finance Review 68 (2008): 151-157.
6 J. Linnerooth-Bayer, M. J. Bals, and R. Mechler (in press). “Insurance as Part of a Climate Adaptation Strategy,” in M. Hulme and H. Neufeldt, eds., Making Climate Change Work for Us: European Perspectives on Adaptation and Mitigation Strategies (Cambridge: Cambridge University Press, 2009).
7 Howard Kunreuther and Erwann Michel-Kerjan, At War with the Weather (Cambridge, MA: MIT Press, 2009).
8 Skees et al., “Creating Insurance Markets for Natural Disaster Risk in Lower-Income Countries,” p. 9.
Chapter 27 Keeney: Thinking Clearly About Policy Decisions
1 Bond, Carlson, and Keeney (2008).
Chapter 29 O’Connor and Wenger: Influential Social Science, Risks, and Disasters
1 The opinions expressed in this chapter are the sole view of the authors and do not necessarily reflect the views of the National Science Foundation or anyone else.
2 See, for example, A. Rubin, Brave New Ballot: The Battle to Safeguard Democracy in the Age of Electronic Voting (New York: Morgan Road Books, 2006), and R. M. Alvarez and T. E. Hall, Electronic Elections: The Perils and Promises of Digital Democracy (Princeton: Princeton University Press, 2008).
Chapter 30 Kunreuther: Reflections and Guiding Principles for Dealing with Societal Risks
1 Howard Kunreuther and Erwann Michel-Kerjan, At War with the Weather: Managing Large-Scale Risks in a New Era of