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Treatment of Uncertainty in Economics (II)

Treatment of Uncertainty in Economics (II). Economics 331b. The payoff matrix (in utility units). Optimal policy with learn then act. Expected loss = 90% x 0 + 10% x -1 = -0.1%. This example: Learn then act. High carbon tax. High damages. ACT in future. LEARN TODAY.

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High damages - PowerPoint PPT Presentation

Treatment of Uncertainty in Economics (II)