CentER

Expected utility and catastrophic risk

August 16, 2010

We provide:

1. Links to four papers:
   (a) Ikefuji, M., R.J.A. Laeven, J.R. Magnus, and C. Muris (2010a), Expected utility and catastrophic risk in a stochastic economy-climate model, Tilburg University
   (b) Ikefuji, M., R.J.A. Laeven, J.R. Magnus, and C. Muris (2010b), Scrap value functions in dynamic decision problems, Tilburg University
   (c) Ikefuji, M., R.J.A. Laeven, J.R. Magnus, and C. Muris (2010c), Burr utility, Tilburg University
   (d) Ikefuji, M., R.J.A. Laeven, J.R. Magnus, and C. Muris (2010d), Catastrophe, VSL, and curvature, Tilburg University.
   
2. The GAMS code ILMM-SICE.gms, which is an adapted and shortened version of DICE delta version 8 (July 17, 2008) from: Nordhaus, W.D. (2008), A Question of Balance: Weighing the Options on Global Warming Policies, Yale University Press, New Haven, CT. The adaptation (called SICE: simplified version of DICE) is described in detail in: Ikefuji et al. (2010a).
   
3. One output file benchmark.put.
   
   

After running the code ILMM-SICE.gms, your output can be found in two put-files: early_output.put and all_output.put.

The file all_output.put should be the same as benchmark.put. The output in all_output.put is formatted in such a way that it can be easily converted to a spreadsheet. The file contains a row of optimal (or predetermined) values for each of the following variables:

• AL
• SIGMA
• PSI
• L
• K
• MAT
• TATM
• YGROSS
• I
• C
• E
• OMEGA
• D
• MIU
• PERIODU

The file early_output.put is organized similarly, but only contains values for the first 20 periods.

The SICE code may be used freely, but reference should be made to Ikefuji et al. (2010a) or to the published version of this paper.

The authors accept no responsibility for any errors or malfunctions in the program. Tested with GAMS 22.5.

Comments and suggestions are welcome and should be addressed to Jan Magnus.