The role of scientific uncertainty in decision making.

Summary This thesis aims to make a contribution to information economics by clarifying the role of scientific uncertainty on decision making. The thesis consists of 6 chapters. Chapter 1 is a general introduction. Chapter 2 is an introduction or information structures and a collection of technical results that are used in the following chapters. Chapter 3 deals with the effect of a better information structure on the optimal level of irreversibility in a model with several technologies. In this chapter we explore the possibility that the choice of a less irreversible technology when more information is expected in the future may not be optimal in all circumstances. Chapter 4 studies the effect of information on the investment in self-protection. It is shown that if one interprets the precautionary principle as requiring more self-protection today, it is difficult to accept it as effective. Chapter 5 shows that rational and well-informed patients will reduce their preventive activities when they expect improvements in diagnostic technology. Chapter 6 studies the international trade in goods subject to scientific uncertainty about the health effects of consumers. It is shown that a new form of protectionism may arise because of scientific uncertainty.