Organizations under Large Uncertainty: An Analysis of the Fukushima Catastrophe
This paper analyzes the impacts of the March 11, 2011, earthquake and tsunami at the Fukushima nuclear power plant in Japan, which were amplified by a failure of coordination across the plant, corporate, industrial, and regulatory levels, resulting in a nuclear catastrophe comparable in cost to Chernobyl. It derives generic lessons for industrial structure and regulatory frame for the electric power industry by identifying the two shortcomings of a horizontal coordination mechanism: instability under large shocks and the lack of defense in depth.The suggested policy response is to harness the power of Òopen-interface-rule-based modularity by creating an independent nuclear safety commission and an independent system operator owning the transmission grid module in Japan. We propose a transitory price mechanism that can restrain price volatility while providing investment incentives.
|Date of creation:||Jan 2011|
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- Alonso, Ricardo & Dessein, Wouter & Matouschek, Niko, 2006.
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- Bushnell, James & Hobbs, Benjamin & Wolak, Frank, 2009.
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Staff General Research Papers Archive
13141, Iowa State University, Department of Economics.
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- Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530, December.
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