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The Economics of Societal Decisions under Risk
Last Updated: 2026-02-05 15:36:31
Abstract
Societal decisions often involve risk. For instance, should a new drug or pesticide be approved, given the unknown side-effects to human health and the environment? What principles should guide such decisions? This course provides the theoretical toolkit for societal decision-making under risk and contrasts theoretical recommendation with the actual regulatory practice.
Objective
Based on their knowledge of normative frameworks of societal decision-making under risk, students will be able to break down a real-world decision problem into its relevant components, provide an informed recommendation, critically discuss robustness and limitations, and judge the practical relevance of their analysis.
Content
PART I. DECISION THEORETIC METHODS - Rational decisions: What's that? - Decisions rules and the idea of Precaution PART II. COST-BENEFIT ANALYSIS (CBA) - The components of cost-benefit analysis - Conceptual foundation and criticism - Uncertainty in CBA PART III. ADVANCED TOPICS - Sequential decision-making - Value of information; quasi-option value; option value - Model uncertainty and non-expected utility - Incentives and behaviour: the tension between ex-ante and ex-post - Institutional and international aspects of risk regulation
Resources
Lecture Notes
n/a
Literature
Teaching material will be provided via moodle (slides, videos, readings). Relevant textbooks are 1. Gilboa, I. (2010). Rational Choice. The MIT Press. 2. Boardman, Anthony E., David H. Greenberg, Aidan R. Vining, und David L. Weimer. Cost-benefit analysis: concepts and practice. Cambridge University Press, 2017.
General Information
- Language
- English
- Levels
- MSC , NDS
- Frequency
- Yearly recurring
Examination
- Type
- graded semester performance
Course Components
| Type | Title | Time & Place | Hours |
|---|---|---|---|
| lecture |
The Economics of Societal Decisions under Risk
The lecture takes place ONLINE via Zoom (recorded).
The lecturers will communicate the exact lesson times of ONLINE courses.
|
|
2 h weekly |
Offered In
-
Management, Technology and Economics Master (Welcome and Introduction to MSc ETH MTEC Montag, 14.09.2020, 14.00 h, HG E1.1 (tbc))
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MAS in Management, Technology, and Economics (MAS MTEC Introductory Event for 1st Semester Students. Monday, 14.09.2020, 16.00 h, HG E1.2 (tbc))