IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Catastrophic Risk and Egalitarian Principles for Risk Transfer Mechanisms

  • Franz E. Prettenthaler
Registered author(s):

    Financial aid for the worst-off victims of earthquakes and other catastrophes seems to be a morally unquestioned principle for the allocation of public funds. This paper shows however, that this principle is ambiguous if the decision is viewed as a dynamic choice problem where such resources need to be allocated in two periods: before and after the event takes place (before and after uncertainty is resolved). The literature on social choice suggests that utilitarian principles fare better in such situations. This paper provides a uniform formal framework to relate one such result, namely a multi-profile version of Harsanyis 1955 theorem by Mongin (1994) to another one by Myerson (1981), stated in a somewhat unconventional social choice framework. It shows that the linearity condition, that is met only by welfare functions of the utilitarian type, has a natural interpretation in terms of an equivalence of ex-ante and ex-post evaluation, a concept that is related to but not equivalent with dynamic consistency.

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Article provided by Duncker & Humblot, Berlin in its journal Schmollers Jahrbuch.

    Volume (Year): 128 (2008)
    Issue (Month): 4 ()
    Pages: 549-560

    as
    in new window

    Handle: RePEc:aeq:aeqsjb:v128_y2008_i4_q4_p549-560
    Contact details of provider: Web page: http://www.duncker-humblot.de

    Order Information: Web: http://www.duncker-humblot.de/index.php/zeitschriften/wirtschafts-undsozialwissenschaften/schmollersjahrbuch-1.html Email:


    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:aeq:aeqsjb:v128_y2008_i4_q4_p549-560. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gabriele Freudenmann)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.