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Decision‐Making, Time Horizons, and Risk in the Very Long‐Term Perspective

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  • Ola Svenson
  • Gunnar Karlsson

Abstract

Some decisions made today have far‐reaching consequences as exemplified by those concerning nuclear power and spent nuclear fuel. The investigation presented here uses a decision theoretic framework in which time horizons and the discounting of negative consequences play significant roles. The results indicated wide variations in the lengths of the planning horizons judged to be adequate not only across a number of activities, including nuclear waste management, but also across groups of subjects (e.g., engineering students, retired people, and nuclear fuel experts). The paper reports typical judgments and correlations between different variables for different groups of subjects. The differences across groups reflect potential sources of conflict, depending in part on different values and different perceptions of more or less uncertain facts. Discounting functions for negative consequences in the future were also established. A range in differences in the speed of discounting were found and illustrated. Furthermore, it was found that substantial proportions in all groups regarded negative consequences related to nuclear waste as nondiscountable. When asked about the effect of time until outcome on acceptable probability of a negative outcome, many subjects used the probability concept in an incoherent way, illustrating the great difficulty in communicating small probabilities in a long‐term risk context.

Suggested Citation

  • Ola Svenson & Gunnar Karlsson, 1989. "Decision‐Making, Time Horizons, and Risk in the Very Long‐Term Perspective," Risk Analysis, John Wiley & Sons, vol. 9(3), pages 385-399, September.
  • Handle: RePEc:wly:riskan:v:9:y:1989:i:3:p:385-399
    DOI: 10.1111/j.1539-6924.1989.tb01004.x
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    References listed on IDEAS

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    1. Ralph L. Keeney, 1987. "An Analysis of the Portfolio of Sites to Characterize for Selecting a Nuclear Repository," Risk Analysis, John Wiley & Sons, vol. 7(2), pages 195-218, June.
    2. Miley W. Merkhofer & Ralph L. Keeney, 1987. "A Multiattribute Utility Analysis of Alternative Sites for the Disposal of Nuclear Waste," Risk Analysis, John Wiley & Sons, vol. 7(2), pages 173-194, June.
    3. Svenson, Ola, 1985. "Cognitive strategies in a complex judgment task: Analyses of concurrent verbal reports and judgments of cumulated risk over different exposure times," Organizational Behavior and Human Decision Processes, Elsevier, vol. 36(1), pages 1-15, August.
    4. Jay J.J. Christensen-Szalanski, 1984. "Discount Functions and the Measurement of Patients' Values," Medical Decision Making, , vol. 4(1), pages 47-58, February.
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    2. Ball, Christopher T. & Langholtz, Harvey J. & Auble, Jacqueline & Sopchak, Barron, 1998. "Resource-Allocation Strategies: A Verbal Protocol Analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 76(1), pages 70-88, October.

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