search query: @indexterm economic conditions / total: 1703
reference: 139 / 1703
| Author: | Gollier, C. |
| Title: | Should we beware of the Precautionary Principle? |
| Journal: | Economic Policy
2001 : OCT, 33, p. 301-328 |
| Index terms: | ECONOMICS ECONOMIC CONDITIONS RISK RISK ANALYSIS |
| Language: | eng |
| Abstract: | The authors show in this paper that the Precautionary Principle contradicts one important intuition about the right way to act in the face of risk, namely the principle of looking before you leap. When we expect to learn more about the future, the effectiveness of our preventive measures will be greater if we learn before we act. Postponing preventive measures may increase our vulnerability to damage, which induces a precautionary motive for risk-prevention, similar to the precautionary savings motive. Stronger preventive actions often yield more flexibility for the future, so that acting early has an option value. When better information comes from a process of learning-by-doing, the risk associated with early events is amplified by the information they yield about the future. |
SCIMA