On measuring and profiling catastrophic risks
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An approach to decision-making under catastrophic risks based on risk profiling is proposed. The approach assumes, for some selected catastrophic scenarios, to simulate their consequences (damage) as functions of control parameters and to impose expert constraints on acceptable levels of relative losses in such scenarios. The approach is illustrated by a number of one-stage decision-making problems reduced to mixed linear-programming problems.
Keywordscatastrophic risk catastrophic flood risk profiling risk measures risk functions indifference curves decision-making investments risk zoning insurance
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