This Is the Way the World Ends, Not with a Bang but Bonds and Bullets

Frontiers in Climate (Dec. 2, 2021), DOI: 10.3389/fclim.2021.758021

12 Pages Posted: 2 Sep 2021 Last revised: 2 Dec 2021

See all articles by James Ming Chen

James Ming Chen

Michigan State University - College of Law

Date Written: August 13, 2021

Abstract

This article explores instinctive frames of human decision-making in environmental and resource economics. Higher-moment asset pricing combines rational, mathematically informed economic reasoning with psychological and biological insights. Leptokurtic blindness and skewness preference combine in particularly challenging ways for carbon mitigation. At their worst, human heuristics may generate perverse decisions. Information uncertainty and the innate preference for bonds-and-bullets portfolios may impair responses to catastrophic climate change.

Keywords: skewness, kurtosis, information uncertainty, irreversibility, environmental economics, asset pricing, portfolio theory

Suggested Citation

Chen, James Ming, This Is the Way the World Ends, Not with a Bang but Bonds and Bullets (August 13, 2021). Frontiers in Climate (Dec. 2, 2021), DOI: 10.3389/fclim.2021.758021, Available at SSRN: https://ssrn.com/abstract=3904934 or http://dx.doi.org/10.2139/ssrn.3904934

James Ming Chen (Contact Author)

Michigan State University - College of Law ( email )

318 Law College Building
East Lansing, MI 48824-1300
United States

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