Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74016
Authors: 
Gilotte, Laurent
de Lara, Michel
Year of Publication: 
2005
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 28.2005
Abstract: 
For a sequential, two-period decision problem with uncertainty and under broad conditions (non-finite sample set, endogenous risk, active learning and stochastic dynamics), a general sufficient condition is provided to compare the optimal initial decisions with or without information arrival in the second period. More generally the condition enables the comparison of optimal decisions related to different information structures. It also ties together and clarifies many conditions for the so-called irreversibility effect that are scattered in the environmental economics literature. A numerical illustration with an integrated assessment model of climate-change economics is provided.
Subjects: 
Value of Information
Uncertainty
Irreversibility effect
Climate change
JEL: 
D62
D63
H23
Q29
Document Type: 
Working Paper

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