The notion of intertemporal h-option value is introduced to extend to environmental decision-making problems of the concept of quasi-option value, defined by Arrow and Fisher and Henry, whenever an individual faces imprecise information, or hard uncertainty, represented by a non-additive measure over events. Under hard uncertainty and irreversibility, the decision-maker faces the intertemporal h-option value, that is an uncertainty premium of preservation, which represents the gain from being able to learn about the future consequences of irreversible actions. The intertemporal h-option value is a correction factor that has to be taken into account in evaluating the total economic value of feasible actions.

Basili, M. (1998). Quasi-Option Value and Hard Uncertainty. ENVIRONMENT AND DEVELOPMENT ECONOMICS, 3(4), 417-423.

Quasi-Option Value and Hard Uncertainty

BASILI, MARCELLO
1998

Abstract

The notion of intertemporal h-option value is introduced to extend to environmental decision-making problems of the concept of quasi-option value, defined by Arrow and Fisher and Henry, whenever an individual faces imprecise information, or hard uncertainty, represented by a non-additive measure over events. Under hard uncertainty and irreversibility, the decision-maker faces the intertemporal h-option value, that is an uncertainty premium of preservation, which represents the gain from being able to learn about the future consequences of irreversible actions. The intertemporal h-option value is a correction factor that has to be taken into account in evaluating the total economic value of feasible actions.
Basili, M. (1998). Quasi-Option Value and Hard Uncertainty. ENVIRONMENT AND DEVELOPMENT ECONOMICS, 3(4), 417-423.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11365/7821
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