Veranstaltungen
15. Dezember 2025, 17:00 bis 17:30
Economic Theory & Policy Seminar / A. Brausmann (University of Vienna / Misfortunes Never Come Singly: Managing the Risk of Chain Disasters
Seminar
“Misfortunes Never Come Singly: Managing the Risk of Chain Disasters”
Alexandra Brausmann, öffnet eine externe URL in einem neuen Fenster (University of Vienna)
with Lucas Bretschger and Aleksey Minabutdinov
Large economic, ecological, natural and health-related disasters have the poten-
tial to set off a sequence of secondary calamities, initiating cascading effects that
impose substantial additional economic costs. This paper examines the repercus-
sions of contagion effects for optimal public policy. We compare the optimality of
precautionary measures taken ahead of time with a ”reactive” approach to disaster
management, i.e. disaster-mitigation efforts adopted after the gravity of the first
shock has been established. We develop a novel dynamic stochastic framework,
where disaster arrivals are modelled via the Hawkes process which possesses a self-
excitation mechanism. We derive analytical solutions and show that the optimal
policy consists of devoting a stochastic fraction of output to disaster-mitigation.
The mitigation propensity is an increasing function of the Hawkes intensity and
essentially tracks disaster arrivals. The latter implies that the policy is indeed re-
active. This result is in contrast with the existing literature, which does not take
into account the possibility of contagion and therefore finds a constant mitigation
propensity to be optimal.
Veranstaltung Details
- Veranstaltungsort
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TU Wien
1040 Vienna
Wiedner Hauptstr. 8-10, Seminarroom: Zeichensaal 1 (Freihaus Building, green area, 8th floor) - Veranstalter
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ECON
Julia Hutter
julia.hutter@tuwien.ac.at - Öffentlich
- Ja
- Kostenpflichtig
- Nein
- Anmeldung erforderlich
- Nein