Economics and Finance of Risk and of the Future - Hardcover

Robert Kast; André Lapied

Hardcover

ISBN 10: 0470015772 ISBN 13: 9780470015773

Publisher: John Wiley & Sons, 2006

Synopsis

This book uses real–world examples to show how individual and collective risks can be blended and treated in a reliable decision–making framework that draws its inspiration from decision theory and market based mechanisms. It then goes into deeper detail by looking at the implications of having to face risks (a) where some kind of probabilistic description is available and (b) where none is available, using the example of insurable risks vs non–insurable risks. Again, by using real–world examples it shows how decision–makers can cope with such situations by a proper understanding and use of modern financial techniques.

About this title

About the Author

Professor ROBERT KAST has a research position at LAMETA–CNRS, University of Montpellier (France) and has published papers and books in decision theory and financial market theory.

ANDRÉ LAPIED is Professor of Economics at GREQAM, University Paul Cézanne in Aix–en–Provence (France) and has published papers and books in financial market theory and economic theory.

They work together in risk theory and have achieved several governmental investigations on applied problems. Some of them raise questions on risk management that are addressed in this book.

From the Back Cover

Human institutions are continuously threatened by both man–made and natural disasters. They provoke damages that may be hard to value and to compensate, and may also induce simultaneous defaults in industry and in insurance. When prevention means fail, economic and financial instruments become necessary to manage risks.

The scope of this book is to introduce new instruments based on the most recent developments in economics and finance theory. Public economics, decision theory, and arbitrage pricing in financial markets are all areas where these practical tools can be used. Applications are found for: public and private project management, insurable and non insurable risks, static and dynamic hedging of financial investments.

Traditional approaches to risk analysis do not question the relevance of some outdated assumptions. In contrast, this book screens classical tools and considers hypothesis that allow to answer, among others, the following questions:

• How to measure uncertainties when non–controversial probability distribution are not available?
• How to give a monetary value to non–tradable goods and assets?
• When can an individual valuation be implemented for a collective choice?
• How to use the powerful tools of finance to take into account irreversibilities and flexibilities so crucial to challenge huge risks?

From the Inside Flap

Economics and finance of risk and of the future

"Economics and Finance of Risks and of the Future reviews thoroughly modern theories and applications of the management of insurable and non–insurable risks, uncertainty and time flexibility that arise in public or private investment decisions. Robert Kast and André Lapied have done a superb job. Their book should be extremely useful to students, researchers and professional decision–makers in the fields of public choice, finance or insurance.   Jean–Michel Grandmont, ICEF, Venice International University and CREST–GREQSTA

Robert Kast and André Lapied have developed powerful theoretical and methodological tools, that they have then applied to an array of seemingly rather different decision problems. This is the best test I know to judge of the originality and usefulness of a book. Here the test is brilliantly passed.   Claude Henry, professor at Ecole Polytechnique, Visiting professor at Columbia University

Edition details

• Publisher: John Wiley & Sons
• Publication date: 2006
• Language: English
• ISBN 10: 0470015772
• ISBN 13: 9780470015773
• Binding: Hardcover
• Number of pages: 240