Perceptions,fear, and economic loss: an application of prospect theory to environmental decision making

Most of the analysis of costs associated with the introduction of risky prospects has concerned contingent costs amenable to insurance programs. An important missing element is the current cost associated with changes in uncertainty. These costs are not amenable to insurance plans and require compensation in order to prevent transfers. In a novel approach, this paper develops an application of prospect theory to such questions, in an intergenerational context. The importance of such an application is demonstrated in a case study of the high-level nuclear waste repository (HNWR) siting decision. As a case study, the costliness of obtaining some elements of the analysis leads to a simulation approach, comparing prospect costs at the three sites that were under consideration by the U.S. Department of Energy. Finding that such costs can be large, we argue for a reassessment of current risk analysis approaches. On a policy note, on the basis of the prospect cost analysis here, the choice of the Yucca Mountain, Nevada, HNWR site seems ill-advised.     

CORPORATE MAKAHIKI: THE GOVERNING TELOS OF PEACE

Lono presided over the annual makahiki celebrations, which where held on the island for four consecutive months, usually from October or November through February or March. This was a time of ritual, sports competition, offerings to the chiefs, divination of the fruitfulness of the coming year, and much feasting and hula. During the makahiki war was forbidden, people did little work and enjoyed themselves. ¹