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Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change

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  • Trudy Cameron

Abstract

Willingness to support public programs for risk management often depends on individual subjective risk perceptions in the face of uncertain science. As part of a larger study concerning climate change, we explore individual updated subjective risks as a function of individual priors, the nature of external information, and individual attributes. We examine several rival hypotheses about how subjective risks change in the face of new information (Bayesian updating, alarmist learning, and ambiguity aversion). The source and nature of external information, as well as its collective ambiguity, can have varying effects across the population, in terms of both expectations and uncertainty. Copyright Springer Science + Business Media, Inc. 2005

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  • Trudy Cameron, 2005. "Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change," Journal of Risk and Uncertainty, Springer, vol. 30(1), pages 63-97, January.
    • Handle: RePEc:kap:jrisku:v:30:y:2005:i:1:p:63-97
    DOI: 10.1007/s11166-005-5833-8
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    More about this item

    Keywords

    risk elicitation; subjective probability; prior/posterior distributions; ambiguity aversion; Bayesian updating; alarmist learning;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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