Asteroids: Assessing Catastrophic Risks
We evaluate two risk profiles: (i) global warming risks and (ii) collisions with asteroids that can cause the extinction of our species. The expected values computed for these two risks suggest that no action will be taken to avoid extinction. The result is somewhat counterintuitive, but it is typic...
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| Format: | Article |
| Language: | English |
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Wiley
2010-01-01
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| Series: | Journal of Probability and Statistics |
| Online Access: | http://dx.doi.org/10.1155/2010/954750 |
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| _version_ | 1832559978989223936 |
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| author | Graciela Chichilnisky Peter Eisenberger |
| author_facet | Graciela Chichilnisky Peter Eisenberger |
| author_sort | Graciela Chichilnisky |
| collection | DOAJ |
| description | We evaluate two risk profiles: (i) global warming risks and (ii) collisions with asteroids that can cause the extinction of our species. The
expected values computed for these two risks suggest that no action will be taken to avoid extinction. The result is somewhat counterintuitive, but it is typical of the results of using classic decision theory to evaluate catastrophic risks in the distant future, see the study by Posner (2004). We establish why expected value is insensitive to catastrophic risks see the study by Chichilnisky (1996), and use another criterion to evaluate risk based on axioms for choice under uncertainty that update the classic Von Neumann theory and require equal treatment for rare and frequent events. Optimizing according to the new criterion is shown to be equivalent to optimizing expected utility with a restriction on the worst outcome in the case of a catastrophe. The evaluation obtained from the new criterion seems more intuitively plausible, and suggests a more practical and realistic approach to catastrophic risks: optimizing expected value
while minimizing losses in the case of a catastrophe. |
| format | Article |
| id | doaj-art-76a5b971a2d84938b994c50a50d4e261 |
| institution | Kabale University |
| issn | 1687-952X 1687-9538 |
| language | English |
| publishDate | 2010-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Probability and Statistics |
| spelling | doaj-art-76a5b971a2d84938b994c50a50d4e2612025-02-03T01:28:49ZengWileyJournal of Probability and Statistics1687-952X1687-95382010-01-01201010.1155/2010/954750954750Asteroids: Assessing Catastrophic RisksGraciela Chichilnisky0Peter Eisenberger1Columbia University, New York, NY 10027, USAColumbia University, New York, NY 10027, USAWe evaluate two risk profiles: (i) global warming risks and (ii) collisions with asteroids that can cause the extinction of our species. The expected values computed for these two risks suggest that no action will be taken to avoid extinction. The result is somewhat counterintuitive, but it is typical of the results of using classic decision theory to evaluate catastrophic risks in the distant future, see the study by Posner (2004). We establish why expected value is insensitive to catastrophic risks see the study by Chichilnisky (1996), and use another criterion to evaluate risk based on axioms for choice under uncertainty that update the classic Von Neumann theory and require equal treatment for rare and frequent events. Optimizing according to the new criterion is shown to be equivalent to optimizing expected utility with a restriction on the worst outcome in the case of a catastrophe. The evaluation obtained from the new criterion seems more intuitively plausible, and suggests a more practical and realistic approach to catastrophic risks: optimizing expected value while minimizing losses in the case of a catastrophe.http://dx.doi.org/10.1155/2010/954750 |
| spellingShingle | Graciela Chichilnisky Peter Eisenberger Asteroids: Assessing Catastrophic Risks Journal of Probability and Statistics |
| title | Asteroids: Assessing Catastrophic Risks |
| title_full | Asteroids: Assessing Catastrophic Risks |
| title_fullStr | Asteroids: Assessing Catastrophic Risks |
| title_full_unstemmed | Asteroids: Assessing Catastrophic Risks |
| title_short | Asteroids: Assessing Catastrophic Risks |
| title_sort | asteroids assessing catastrophic risks |
| url | http://dx.doi.org/10.1155/2010/954750 |
| work_keys_str_mv | AT gracielachichilnisky asteroidsassessingcatastrophicrisks AT petereisenberger asteroidsassessingcatastrophicrisks |