The overall purpose of this project is to develop an improved model of decision making under risk and uncertainty. Specific objectives of the project are: (1) to examine the theoretical and empirical bases of lottery-dependent expected utility models; (2) to study the role of ambiguity in the specification of probabilities; (3) to empirically test several models of preference; and (4) to develop a model that incorporates equity considerations in the development of risk management alternatives. Despite the importance of equity considerations in the decision making process, little effort has been made to develop models that explicitly address issues related to the distribution of risks and benefits. Results of this innovative project will be used to identify strategies that can simultaneously maximize efficiency and equity. It is expected that this project will be useful to analysts and decision makers in formulating and evaluating alternative risk management strategies.
