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Isn't this an incomplete characterization of the quote, because U and WTP accrue to different agents? Or are you assuming that industry WTP reflects a complete and enforceable liability for public U? If so, it would seem that this WTP is normative, i.e. what shareholders ought to be willing to pay if they knew the objective p and q, q' on the rhs. That could differ a lot from actual WTP if perceptions of the distribution are wrong, or principal-agent problems within the firm lead managers to take greater risks than shareholders would prefer.
Commented May 12, 2010 on U(q,y-WTP) = pU(q',y) + (1-p)U(q,y) at Environmental Economics
U(q,y-WTP) = pU(q',y) + (1-p)U(q,y)
Jeffrey Short, a former scientist with the National Oceanic and Atmospheric Administration who now works for the environmental group Oceana, said it was clear that the industry was not willing to pay for enough boats and booms to enclose such a fast-growing spill. “It’s just really hard to cor...
Isn't this an incomplete characterization of the quote, because U and WTP accrue to different agents? Or are you assuming that industry WTP reflects a complete and enforceable liability for public U? If so, it would seem that this WTP is normative, i.e. what shareholders ought to be willing to pay if they knew the objective p and q, q' on the rhs. That could differ a lot from actual WTP if perceptions of the distribution are wrong, or principal-agent problems within the firm lead managers to take greater risks than shareholders would prefer.
Commented May 12, 2010 on U(q,y-WTP) = pU(q',y) + (1-p)U(q,y) at Environmental Economics
U(q,y-WTP) = pU(q',y) + (1-p)U(q,y)
Jeffrey Short, a former scientist with the National Oceanic and Atmospheric Administration who now works for the environmental group Oceana, said it was clear that the industry was not willing to pay for enough boats and booms to enclose such a fast-growing spill. “It’s just really hard to cor...
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May 12, 2010
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