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Essential aspects regarding the optimal prevention

Author

Listed:
  • Constantin ANGHELACHE

    (Bucharest University of Economic Studies)

  • Mario G.R. PAGLIACCI

    (Universita degli Studi di Perugia)

  • Emilia STANCIU

    (Bucharest University of Economic Studies)

  • Cristina SACALÃ

    (Bucharest University of Economic Studies)

Abstract

It is recurrently very likely for decision-makers to wrongly assess risk and consequently to ineffectively put effort in diminishing or avoiding it. Preventing losses or self-protection represent an effort we make in order to reduce the impact of a probable accident. The question is: what would be the level that maximizes the estimated utility of an economic agent? In many cases, the cost-benefit an analysis of prevention is analyzed based on the risk-neutrality assumption. This means that only losses of average size matter. There is no intention of reducing the variability of losses if it doesn’t involve a loss above average. The extreme measure of risk prevention is giving up any type of risk.

Suggested Citation

  • Constantin ANGHELACHE & Mario G.R. PAGLIACCI & Emilia STANCIU & Cristina SACALÃ, 2016. "Essential aspects regarding the optimal prevention," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 64(1), pages 38-42, January.
    • Handle: RePEc:rsr:supplm:v:64:y:2016:i:1:p:38-42
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    References listed on IDEAS

    as
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