Supplementary Exercises > Choice and Cost Benefit Analysis

Uncertainty and Expected Value

Most of these also involve present value calculations. All have solutions available.
Fuel cell research under uncertainty
Includes calculations of the value of perfect and imperfect information.
Gambling on the World Series
Straightforward analysis of a gamble.
Global warming
A stylized version of a real policy problem involving both uncertainty and long spans of time.
Insurance and pooling of risks
Illustrates the "adverse selection" problem that lies behind the common requirement of employer-sponsored health insurance plans that everyone must participate.
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Peter J Wilcoxen, The Maxwell School, Syracuse University
Revised 12/10/2004