Self-Protection, Information and the Precautionary Principle |
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Authors: | Giovanni Immordino |
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Institution: | (1) Gremaq, Université de Toulouse and CSEF, University of Salerno, V. Ponte Don Melillo, 80084 Fisciano, Italy |
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Abstract: | In this paper we examine the effect of information on investment in self-protection. We show that the relationship between more information and investment in self-protection is ambiguous in general. If absolute risk aversion is constant, then investment in self-protection always decreases with a better information structure. We show that if we interpret the Precautionary Principle as requiring more self-protection today, it is difficult to accept it on the grounds of efficiency, except for a particular subset of information structures. |
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Keywords: | self-protection comparative statics information structure Precautionary Principle |
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