Societal Decision Making for Low Probability Events: Descriptive and Prescriptive Aspects

Kunreuther, H.C. (1980). Societal Decision Making for Low Probability Events: Descriptive and Prescriptive Aspects. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-80-164

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Abstract

Society has become increasingly concerned with the appropriate procedures for evaluating projects which promise to yield long-run benefits, but also create potentially catastrophe consequences. Recent examples of such problems are the siting of energy facilities such as nuclear power plants or liquefied natural gas (LNG) terminals.

This paper has two principal purposes. Utilizing recent theoretical and empirical contributions to the literature on choice under uncertainty, it proposes a descriptive model as to how such decisions are reached in the United States. On the basis of this descriptive model, suggestions are made for improving the process. The paper thus attempts to integrate descriptive and prescriptive components for analyzing these societal problems.

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