Risk Analysis in Theory and Practice

Risk Analysis in Theory and Practice

1st Edition - June 4, 2004

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  • Author: Jean-Paul Chavas
  • Hardcover ISBN: 9780121706210
  • eBook ISBN: 9780080516332

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Description

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.

Key Features

  • Balanced treatment of conceptual models and applied analysis
  • Considers both private and public decisions under uncertainty
  • Website presents application exercises in Excel

Readership

Academics and professionals in finance and economics

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

Product details

  • No. of pages: 247
  • Language: English
  • Copyright: © Academic Press 2004
  • Published: June 4, 2004
  • Imprint: Academic Press
  • Hardcover ISBN: 9780121706210
  • eBook ISBN: 9780080516332

About the Author

Jean-Paul Chavas

Affiliations and Expertise

University of Maryland, College Park, USA

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