UC Davis Agricultural and Resource Economics

Robert Pindyck, Massachusetts Institute of Technology

Averting Catastrophes: The Strange Economics of Scylla and Charybdis

Date and Location

Wednesday, April 29, 2015, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

Faced with numerous potential catastrophes—nuclear and bioterrorism, “megaviruses,”
climate change, and others—which should society attempt to avert? A policy to
avert one catastrophe considered in isolation might be evaluated in cost-benefit terms. But
because society faces multiple catastrophes, simple cost-benefit analysis fails: Even if the
benefit of averting each one exceeds the cost, we should not necessarily avert them all. We
explore the policy interdependence of catastrophic events, and develop a rule for determining
which catastrophes should be averted and which should not.

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