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</td> </tr> </table> <table width="755" cellpadding="10" cellspacing="0"> <tr> <td height="106"><font class="intermed">Main Research Fields:</font> <table cellspacing="2" cellpadding="0" class="normal"> <tr height="8"></tr> <tr> <td>&nbsp;&nbsp;&nbsp;</td> <td><!-- <li> Microeconomics </li></td></tr> <tr><td></td><td> --> <li> Environmental Economics </li></td> </tr> <tr> <td></td> <td><li> Decision Theory </li></td> </tr> <tr> <td></td> <td><li> Intertemporal Welfare Analysis </li></td> </tr> </table></td> <td><font class="intermed">Focus:</font> <table cellspacing="2" cellpadding="0" class="normal"> <tr height="8"></tr> <tr> <td>&nbsp;&nbsp;&nbsp;</td> <td><li> Representation &amp; Evaluation of Uncertainty </li></td> </tr> <tr> <td></td> <td><li> Discounting &amp; Cost Benefit Analysis </li></td> </tr> <tr> <td></td> <td><li> Climate Change </li></td> </tr> </table></td></tr> </table> <table width="479" height="5"></table> <table width="520" height="45" bgcolor="white" border="0"> <tr> <td width="391"><!-- OPENING WORKING PAPERS TABLE --><!-- </br>(Unlinked working papers available on request) --> <table width="479" height="60" border="0"> <tr> <td width="121"><font class="intermed">Working Papers: </font></td> <td width="121"> <font class="normal"> Short Abstracts: </font><br> </td><td width="76"><font class="klein"> <input type="button" value="show all" onClick= "toggleonshort(['short1', 'short2', 'short3','short4', 'short5', 'short6','short7', 'short8', 'short9','short10', 'short11', 'short12'], ['shorthead1', 'shorthead2', 'shorthead3','shorthead4', 'shorthead5', 'shorthead6','shorthead7', 'shorthead8', 'shorthead9','shorthead10', 'shorthead11', 'shorthead12']);"> </font> </td><td width="143"><font class="klein"> <input type="button" value="hide all" onClick="toggleoffshort(['short1', 'short2', 'short3','short4', 'short5', 'short6','short7', 'short8', 'short9','short10', 'short11', 'short12'], ['shorthead1', 'shorthead2', 'shorthead3','shorthead4', 'shorthead5', 'shorthead6','shorthead7', 'shorthead8', 'shorthead9','shorthead10', 'shorthead11', 'shorthead12']);"> </font></td></tr> <tr> <td>&nbsp;</td> <td><font class="normal"> Full Abstracts: </font></td> <td><font class="klein"> <input type="button" value="show all" onClick= "toggleonlong(['long1', 'long2', 'long3','long4', 'long5', 'long6','long7', 'long8', 'long9','long10', 'long11', 'long12'], ['longhead1', 'longhead2', 'longhead3','longhead4', 'longhead5', 'longhead6','longhead7', 'longhead8', 'longhead9','longhead10', 'longhead11', 'longhead12']);"> </font></td> <td> <font class="klein"> <input type="button" value="hide all" onClick="toggleofflong(['long1', 'long2', 'long3','long4', 'long5', 'long6','long7', 'long8', 'long9','long10', 'long11', 'long12'], ['longhead1', 'longhead2', 'longhead3','longhead4', 'longhead5', 'longhead6','longhead7', 'longhead8', 'longhead9','longhead10', 'longhead11', 'longhead12']);"></font></td></tr> </table></td> </table> <table width="479" height="1">&nbsp </table> <table cellspacing="5" cellpadding="0" class="normal"> <tr><td class="normal"><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2045990" target="top"> Once Upon a Time Preference - How Rationality and Risk Aversion Change the Rationale for Discounting</a> <br> (early version named: Intertemporal Risk Aversion, Stationarity and Discounting) <!-- &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Job Market Paper) </td></tr> --> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short9" style="display: block;"><em>Short</em>: A comprehensive risk attitude eliminates pure time preference from the discounted expected utility model. Rational agents give more weight to the future the more they know about the consequences of their current actions. </span><a id="shorthead9" class="grey" href="javascript:toggleshort('short9','shorthead9');" > (collapse)</a> <span id="long9" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The paper develops an axiomatic framework for rational decision making. The von Neumann-Morgenstern axioms give rise to a richer risk attitude than that captured in the standard discounted expected utility model. I derive three models that permit a more comprehensive risk evaluation. These preference representations differ regarding the consistency requirements that are imposed in the evaluation of uncertain scenarios. Imposing all rationality constraints jointly eliminates pure time preference from economic evaluation. The resulting preference representation still gives reduced weight to expected future utility when uncertainty increases over time. The more we know about the future welfare consequences of our (in) actions, the more weight they receive. If uncertainty is endogenous to the decision process, the new rationale for discounting will yield quite different policy implications than the discounted expected utility model based on pure time preference. </span><a class="grey" id="longhead9" href="javascript:togglelong('long9','longhead9');" >Full Abstract</a> </td></tr></table></td></td> <tr><td class="normal"><a href="http://escholarship.org/uc/item/88x3d1vw" target="top"> What's the rate? Disentangling the Weitzman and the Gollier effect <!--(Draft available upon&nbsp;request)--></a></td></tr> <tr> <td><table cellpadding="0" class = "weite" cellSpacing =5 > <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td valign="top" align="justify"> <!-- <span id="short1" style="overflow:hidden;display:none;"> --> <span id="short1" style="display: block;"> <em>Short</em>: The Weitzman-Gollier puzzle: The seemingly same argument justifies falling and increasing discount rates in the face of uncertainty. The paper shows: These rates mean different things and are created by different channels through which risk affects evaluation. Both make long-term payoffs more attractive.</span><a id="shorthead1" class="grey" href="javascript:toggleshort('short1','shorthead1');" >(collapse)</a> <span id="long1" style="overflow:hidden;display:none;"> <em>Full Abstract</em>: The uncertainty of future economic development affects the term structure of discount rates and, thus, the intertemporal weights that are to be used in cost benefit analysis. The U.K. and France have recently adopted a falling term structure to incorporate uncertainty and the U.S. is considering a similar step. A series of publications discusses the following concern: A seemingly analogous argument used to justify falling discount rates can also be used to justify increasing discount rates. We show that increasing and decreasing discount rates mean different things, can coexist, are created by different channels through which risk affects evaluation, and have the same qualitative effect of making long-term payoffs more attractive.</span><a id="longhead1" class="grey" href="javascript:togglelong('long1','longhead1');" >Full Abstract</a> </td></tr></table></td></td> <tr><td class="normal"><a href="pdf/Traeger_Discounting_and_Confidence.pdf" target="top"> Discounting and Confidence <!--(Draft available upon&nbsp;request)--></a></td></tr> <tr> <td><table cellpadding="0" class = "weite" cellSpacing =5 > <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short2" style="display: block;"><em>Short</em>: Does ambiguity or a lack of confidence in our forecast increase or decrease the weight on future consumption? How should we discount the future when confidence in our forecasts falls in futurity? </span><a id="shorthead2" class="grey" href="javascript:toggleshort('short2','shorthead2');" > (collapse)</a> <span id="long2" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The paper analyzes the social discount rate under uncertainty, employing a representation that enriches probabilistic descriptions of the world by a degree of confidence. Special cases of the model comprise discounting under smooth ambiguity aversion and under a disentanglement of risk aversion and aversion to intertemporal substitution. I characterize the general class of preferences for which uncertainty reduces the discount rate. I also characterize the class of preferences that lower the discount rate compared to the standard model. I derive a particular parametric discounting formula under the assumptions of isoelastic preferences and normal growth rates. Apart from the usual characteristics, the rate depends on a measure of confidence into future growth estimates and a measure of aversion to the lack of confidence. </span><a id="longhead2" class="grey" href="javascript:togglelong('long2','longhead2');" >Full Abstract</a> </td></tr></table></td></td> <tr><td class="normal"><a href="http://escholarship.org/uc/item/0gw7t7vn" target="top"> Subjective Risk, Confidence, and Ambiguity <!--(Draft available upon&nbsp;request)--></a></td></tr> <tr> <td><table cellpadding="0" class = "weite" cellSpacing =5 > <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short3" style="display: block;"><em>Short</em>: How should we evaluate our uncertain future once we realize that there are different types of uncertainty? The classical von Neumann-Morgenstern then imply a rational and normatively desirable form of ambiguity attitude neglected in the standard model. </span><a id="shorthead3" class="grey" href="javascript:toggleshort('short3','shorthead3');" > (collapse)</a> <span id="long3" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The paper extends a dynamic version of the classical von Neumann-Morgenstern setting to incorporate a degree of confidence in (or subjectivity of) probabilistic beliefs. It provides a simple axiomatic characterization of a new preference representation that addresses ambiguity from a straight forward perspective, employing only basic tools from risk analysis. Conceptually, the paper renders the concept of smooth ambiguity aversion more precise and extends it to a more general notion of aversion to the subjectivity of belief. The representation maintains the normatively desirable axioms of the standard setting including the von Neumann-Morgenstern axioms and time consistency. </span><a id="longhead3" class="grey" href="javascript:togglelong('long3','longhead3');" >Full Abstract</a> </td></tr></table></td></td> <tr><td class="normal"><a href="http://escholarship.org/uc/item/9nd591ww" target="top"> Tipping Points and Ambiguity in the Integrated Assessment of Climate Change. With Derek Lemoine.</a> </td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short4" style="display: block;"><em>Short</em>: We explicitly capture tipping points in the climate system. We derive the optimal climate policy anticipating Bayesian leraning and incorporating ambiguity and ambiguity aversion. </span><a id="shorthead4" class="grey" href="javascript:toggleshort('short4','shorthead4');" > (collapse)</a> <span id="long4" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The paper analyzes how risky, or ambiguous tipping points in the climate system affect optimal mitigation policies and the social cost of carbon. The tipping points are captured as discrete regime shifts in a recursive relative of the DICE integrated assessment model. We analyze seperately tipping points that affect climate sensitivite and the carbon sinks. The threshold crossing is fully endogenous. The model incorporates smooth ambiguity aversion. </span><a id="longhead4" class="grey" href="javascript:togglelong('long4','longhead4');" >Full Abstract</a> </td></tr> </table></td></td> <tr><td class="normal"><a href="http://escholarship.org/uc/item/1562s275" target="top"> Risk and Aversion in the Integrated Assessment of Climate Change. With Benjamin Crost.</a> </td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short5" style="display: block;"><em>Short</em>: We show how the wide-spread Monte-Carlo approach to address uncertainty in climate change gets climate policy wrong. We analyze the true effect of damage risk and comprehensive risk attitude in a recursive DICE model. </span><a id="shorthead5" class="grey" href="javascript:toggleshort('short5','shorthead5');" > (collapse)</a> <span id="long5" style="overflow:hidden;display:none;"><em>Full Abstract</em>: We analyze how different formulations of uncertainty with respect to climate sensitivity change optimal trajectories in a stylized integrated assessment model. We compare predictions based on ex-ante uncertainty to the predictions derived from the truly random system. For this purpose, we construct a reduced version of the DICE model in a recursive dynamic programming framework. The setting allows us to introduce randomness in every period of an infinite time horizon with a yearly time step. Moreover, in this framework we can use a recursive utility approach to disentangle Arrow Pratt risk aversion from intertemporal substitutability and test whether risk aversion or the modeling structure are more important for uncertainty effects of climate sensitivity on optimal trajectories. </span><a id="longhead5" class="grey" href="javascript:togglelong('long5','longhead5');" >Full Abstract</a> </td></tr> </table></td></td> <tr><td class="normal"><a href="http://escholarship.org/uc/item/2w614303" target="top"> Why Uncertainty Matters - Discounting under Intertemporal Risk Aversion and Ambiguity</a></td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short6" style="display: block;"><em>Short</em>: In the standard economic model, uncertainty has a negligible effect on future project value because of an implicit assumption of risk neutrality. I show how this picture changes dramatically under comprehensive risk and uncertainty attitude. </span><a id="shorthead6" class="grey" href="javascript:toggleshort('short6','shorthead6');" > (collapse)</a> <span id="long6" style="overflow:hidden;display:none;"><em>Full Abstract</em>: Uncertainty has an almost negligible impact on project value in the standard economic model. I show that a comprehensive evaluation of uncertainty and uncertainty attitude changes this picture fundamentally. The illustration of this result relies on the discount rate, which is the crucial determinant in balancing immediate costs against future benefits, and the single most important determinant of optimal mitigation policies in the integrated assessment of climate change. First, the paper removes an implicit assumption of (intertemporal or intrinsic) risk neutrality from the standard economic model. Second, the paper introduces aversion to non-risk uncertainty (ambiguity). I show a close formal similarity between the model of intertemporal risk aversion, which is a reformulation of the widespread Epstein-Zin-Weil model, and a recent model of smooth ambiguity aversion. I merge the models, achieving a threefold disentanglement between, risk aversion, ambiguity aversion, and the propensity to smooth consumption over time. </span><a id="longhead6" class="grey" href="javascript:togglelong('long6','longhead6');" >Full Abstract</a> </td></tr> </table></td></td> <!-- <tr><td class="normal"><a href="http://escholarship.org/uc/item/1b58j8m6" target="top" > Trading Off Generations: Infinitely Lived Agent Versus OLG.</a> With Maik Schneider and Ralph Winkler.</td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short7" style="display: block;"><em>Short</em>: Climate change affects future generations. We derive the extended Rasmsey equation in a continous time overlapping generations model, unreveling the implicit normative assumptions in the current social discounting debate. </span><a id="shorthead7" class="grey" href="javascript:toggleshort('short7','shorthead7');" > (collapse)</a> <span id="long7" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The prevailing literature discusses intergenerational trade-offs predominantly in infinitely-lived agent models despite the finite lifetime of individuals. We discuss these trade-offs in a continuous time OLG framework and relate the results to the infinitely-lived agent setting. We identify three shortcomings of the latter: First, underlying normative assumptions about social preferences cannot be deduced unambiguously. Second, the distribution among generations living at the same time cannot be captured. Third, the optimal solution may not be implementable in overlapping generations market economies. Regarding the recent debate on climate change, we conclude that it is indispensable to explicitly consider the generations&#39; life cycles. </span><a id="longhead7" class="grey" href="javascript:togglelong('long7','longhead7');" >Full Abstract</a> </td></tr> </table></td></td> --> <tr><td class="normal"> The generalized isoelastic model for many commodities &nbsp;&nbsp; (under revision) </td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short8" style="display: block;"><em>Short</em>: I extend the Epstein-Zin-Weil model to a multidimensional consumption space and give an axiomatic foundation. </span><a id="shorthead8" class="grey" href="javascript:toggleshort('short8','shorthead8');" > (collapse)</a> <span id="long8" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The generalized isoelastic model constitutes the most widespread framework for a disentanglement of risk aversion and intertemporal substitutability. The paper characterizes the model axiomatically and extends it to a multi-commodity setting. The generalized isoelatic model exhibits non-nontrivial preference of the timing of risk resolution as well as non-trivial intertemporal risk aversion. Both of these preference characteristics take on a particularly simple form in the isoelastic setting which I briefly discuss. </span><a id="longhead8" class="grey" href="javascript:togglelong('long8','longhead8');" >Full Abstract</a> </td></tr> </table></td></td> <tr><td class="normal"><a href="http://escholarship.org/uc/item/67d581xt" target="top"> Intertemporal Risk Aversion - or - Wouldn&#39;t it be Nice to Know Whether Robinson is Risk Averse?</a></td></tr> <tr> <td><table cellpadding="0" class="weite" cellSpacing =5> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short10" style="display: block;"><em>Short</em>: The paper introduces a new measure of risk aversion in a multidimensional world. The risk measure fleshes out the risk neutral character of the intertemporally additive expected utility standard model. </span><a id="shorthead10" class="grey" href="javascript:toggleshort('short10','shorthead10');" > (collapse)</a> <span id="long10" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The paper introduces a new notion of risk aversion that is independent of the good under observation and its measure scale. The representational framework of the paper builds on a time consistent combination of additive separability on certainconsumption paths and the von Neumann &amp; Morgenstern (1944) assumptions. In the one-commodity special case, the new notion of risk aversion closely relates to a disentanglement of standard risk aversion and intertemporal substitutability. </span><a id="longhead10" class="grey" href="javascript:togglelong('long10','longhead10');" >Full Abstract</a> </td></tr></table></td></td> <!-- <tr height="15"></tr> </table></td></tr> <tr><td> <font class="intermed"> Work in Progress: </font></td></tr> --><!-- OPENING WORK IN PROGRESS TABLE --><!-- <table cellspacing="5" cellpadding="0" class="weite"> <tr height="8"></tr> --><!-- <tr><td class="normal"> Generalized Cost Benefit Analysis and Habit Formation. With Larry Karp. </td></tr> <tr><td><table cellspacing="5" cellpadding="0" > <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> We give a general framework for cost benefit analysis in the case of intertemporally dependent preferences. In a stylized example, we analyze how habit formation affects the discount rate in the face of climate change. </td></tr> </table></td></td> --><!-- <tr height="15"></tr></table></td></tr> --> <tr><td class="normal"><a href="pdf/cba.pdf" target="top"> Generalized Cost-Benefit-Analysis and Social Discounting with Intertemporally Dependent Preferences (Draft 2009). With Larry Karp. </a></td></tr> <tr> <td><table cellpadding="0" class="weite" cellSpacing =5> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short11" style="display: block;"><em>Short</em>: We derive the social discount rate in the context of intertemporally dependent preferences. </span><a id="shorthead11" class="grey" href="javascript:toggleshort('short11','shorthead11');" > (collapse)</a> <span id="long11" style="overflow:hidden;display:none;"><em>Full Abstract</em>: We derive a general framework for cost-benefit analysis and social discounting with intertemporally dependent preferences. Here, the marginal contribution of an additional unit of consumption in some period depends on what is consumed in the other periods. We use a simple model of history dependent preferences to analyze how habit formation affects the social rate of discount. Getting used to good life before a potential decline in growth as well as getting used to bad life during a decline in growth both affect social discount rates, not only during the time of the growth rate change but also before and after. </span><a id="longhead11" class="grey" href="javascript:togglelong('long11','longhead11');" >Full Abstract</a> </td></tr></table></td></td> <tr><td class="normal"> Disentangling Risk Aversion from Intertemporal Substitutability and the Temporal Resolution of Uncertainty &nbsp;&nbsp; (under revision) </td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"><!-- The paper axiomatizes the generalized isoelastic model, which constitutes the most widespread framework for a disentanglement of risk aversion and intertemporal substitutability. I extend the model to a multicommodity setting, relying on the fact that the difference between these two preference characteristics is good-independent. This difference measure, called --> <span id="short12" style="display: block;"><em>Short</em>: I show how intertemporal risk aversion explains Kreps &amp; Porteus&#39;s (1978) preference for early or late resolution of uncertainty. </span><a id="shorthead12" class="grey" href="javascript:toggleshort('short12','shorthead12');" > (collapse)</a> <span id="long12" style="overflow:hidden;display:none;"><em>Full Abstract</em>: A good invariant measure of risk aversion (called intertemporal risk aversion) is used to explain Kreps &amp; Porteus&#39;s (1978) preference for the timing of uncertainty resolution. It arises in standard recursive models disentangling Arrow Pratt risk aversion from intertemporal substitutability. I show how the decision maker&#39;s propensity to smooth consumption over time and to smooth consumption between different risk states can also be disentangled under indifference to the timing of uncertainty resolution and, thus, in a simpler model where uncertainty is expressed directly over consumption paths. </span><a id="longhead12" class="grey" href="javascript:togglelong('long12','longhead12');" >Full Abstract</a> </td></tr> </table></td></tr><!-- <tr><td class="normal"> Formalizing Precaution </td></tr> <tr><td><table cellspacing="5" cellpadding="0" > <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> The analysis discusses different formalizations of the precautionary principle. I contrast approaches of prudence and Knightian uncertainty (ambiguity) with a new formalization in terms of intertemporal risk aversion.</td> </tr> </table></td></td> <tr height="15"></tr></table></td></tr> --&gt; --> <table width="479" height="40">&nbsp </table> <tr><td> <font class="intermed">Publications:</font> <!-- OPENING PUBLICATION TABLE --><!-- <table cellspacing="5" cellpadding="0" class="normal"> <tbody> --> <tr><td><font class="normal">(peer reviewed)</font><br> </td></tr> <table width="479" height="10">&nbsp </table> </td></tr> </table></td></td> <tr><td class="normal"><a href="/pdf/EER_proof.pdf" target="top" > Trading off generations: Equity, discounting, and climate change. </a> With Maik Schneider and Ralph Winkler.</td></tr> <tr><td class="weite"> &nbsp;&nbsp;&nbsp;&nbsp; Forthcoming in European Economic Review. </td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> <span id="short7" style="display: block;"> Climate change affects future generations. We derive the extended Rasmsey equation in a continous time overlapping generations model, unreveling the implicit normative assumptions in the current social discounting debate. <!-- </span><a id="shorthead7" class="grey" href="javascript:toggleshort('short7','shorthead7');" > (collapse)</a> <span id="long7" style="overflow:hidden;display:none;"><em>Full Abstract</em>: The prevailing literature discusses intergenerational trade-offs predominantly in infinitely-lived agent models despite the finite lifetime of individuals. We discuss these trade-offs in a continuous time OLG framework and relate the results to the infinitely-lived agent setting. We identify three shortcomings of the latter: First, underlying normative assumptions about social preferences cannot be deduced unambiguously. Second, the distribution among generations living at the same time cannot be captured. Third, the optimal solution may not be implementable in overlapping generations market economies. Regarding the recent debate on climate change, we conclude that it is indispensable to explicitly consider the generations&#39; life cycles. </span><a id="longhead7" class="grey" href="javascript:togglelong('long7','longhead7');" >Full Abstract</a> </td></tr> --> </table></td></td> <tr><td class="normal"> <a href="http://repositories.cdlib.org/are_ucb/1045/" target="top"> Sustainability, Limited Substitutability and Non-constant Social Discount Rates</a> </td></tr> <tr><td class="weite"> &nbsp;&nbsp;&nbsp;&nbsp;<a href="http://www.sciencedirect.com/science/article/pii/S0095069611000349"> JEEM 2011. 62:215-228. </a></td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> The paper explores limited substitutability in welfare between environmental and produced goods. Limited substitutability affects magnitude and time development of optimal social discount rates. The notions of weak and strong sustainability are translated into the degree of substitutability. I show that a strong notion of sustainability results in lower weights given to long-run service and consumption streams than a weak notion of sustainability. </td></tr> </table></td></tr> <tr><td class="normal"><a href="http://arjournals.annualreviews.org/doi/pdf/10.1146/annurev.resource.050708.144242"> Recent Developments in the Intertemporal Modeling of Uncertainty </a></td></tr> <tr><td class="weite">&nbsp;&nbsp;&nbsp;&nbsp; Annu. Rev. Resour. Econ. 2009. 1:261-85. </td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> Time and uncertainty constitute essential ingredients to many of the most challenging resource problems. This review discusses models and concepts that aim at disentangling time and risk attitude and discusses resource economic applications. If also briefly reviews a generalization of risk attitude to situations where uncertainty is not captured by unique probability measures.</td></tr> </table></td></tr> <tr><td> &nbsp;&nbsp; </td></td> <table width="479" height="20">&nbsp </table> <tr><td><!-- <a href="http://www.ub.uni-heidelberg.de/archiv/7049"> --> <font class="normal">PhD Thesis (Doktorarbeit):</font><br> </td></tr> <tr><td class="normal"><a href="http://www.ub.uni-heidelberg.de/archiv/7049"> Theoretical aspects of long-term evaluation in environmental economics </a></td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> The dissertation addresses the evaluation of long-term trade-offs between economic activity and its environmental repercussions. It concentrates on social discount rates, i.e. the weight given to the long versus the short run, and the treatment of uncertainty. The results render contributions to the fields of environmental economics and decision theory. From an applied view, they directly affect sustainability and cost benefit analysis. <br> The first part of my thesis is dedicated to the relation between the notions of strong and weak sustainability and the time behavior of social discount rates. The second part introduces a new concept of risk aversion, which captures the willingness to undergo preventive action. The concept also provides a way to define a simple risk measure in a mutli commodity setting. It relates aspect of standard risk aversion and intertemporal substitutability. The third part of the dissertation derives several generalized evaluation rules, based on axioms concerning the timing of uncertainty resolution, uncertainty attitude, stationarity and time consistency. In particular I give a simple axiomatization that forces the rate of pure time preference to zero. A decision maker who subscribes to these axioms only discounts for reasons of uncertainty, but not for reasons of impatience.</td></tr> </table></td></tr> <tr><td> &nbsp;&nbsp; </td></td> <table width="479" height="20">&nbsp </table> <tr><td><font class="normal"> Master Thesis (German): </font><br> </td></tr> <tr><td class="normal"> <a href="http://www.ub.uni-heidelberg.de/archiv/4566"> Freedom of choice and the structure of intertemporal decision-making </a></td></tr> <tr><td><table cellspacing="5" cellpadding="0" class="weite"> <tr><td>&nbsp;&nbsp;&nbsp;&nbsp;</td><td valign="top" align="justify"> The thesis investigates how freedom of choice can be integrated into economic welfare analysis. The first part examines existing static axiomatizations of freedom of choice and fleshes out their implicit normative assumptions and shortcomings. It concludes that a meaningful measure of freedom must necessarily account for individual valuation of choice alternatives and the similarity of alternatives. <br> The second part of my thesis analyzes the temporal structure in confining and evaluating opportunity sets. It establishes a relation between evaluation of opportunity sets in terms of freedom and preference for flexibility. I explain how, in a dynamic framework with uncertainty about future preferences, the two criteria to be considered in static axiomatizations (preference valuation of alternatives and similarity judgement) merge. <br> The last part of the thesis elaborates the consequences of these insights for the informational basis of a comprehensive welfare analysis.</td></tr> </table></td></tr> </table></td></tr></tbody></table> <table width="30" height="30"> <tr>&nbsp;</tr> </table></body></html>