An Application to Nuclear Power Generation: From Daniel Bernoulli to J.M. Keynes and F.H. Knight

  • Yasuhiro Sakai
Part of the Evolutionary Economics and Social Complexity Science book series (EESCS, volume 18)


This paper aims to discuss the problem of nuclear power generation from the viewpoint of the economics of risk and uncertainty. Although we have experienced the two major nuclear disasters, Chernobyl and Fukushima, in recent times, it is quite unfortunate that risk-economic studies in nuclear power generation have been extremely rare so far. This may show intentional neglect in the academic circle.

The purpose of this paper is to duly mend such a regrettable tendency. Before 11 March 2011, there were many people who more or less believed in the myth of absolute safety. The Great East Japan Earthquake, however, has completely changed their concept of risk for nuclear power generation, thus requiring the need to take a new risk-economic approach to nuclear energy. As the saying goes, we can learn new lessons from old teachings: we have to reexamine the economics of J.M. Keynes and F. H. Knight. There are surely new possibilities for future research.


Nuclear power generation Risk-economic approach Psychological factors J.M. Keynes F.H. Knight 


  1. Akerlof GA, Shiller RJ (2009) Animal spirits: how human psychology drives the economy, and why it matters for global capitalism. Princeton University Press, PrincetonGoogle Scholar
  2. Arrow KJ (1970) Essays in the theory of risk-bearing. North-Holland, AmsterdamGoogle Scholar
  3. Beck U (1986) Risikogesellschaft: Auf dem Weg in eine andere Moderne (in German). Suhrkamp Verlag, Frankfurt am Main. English translation by Ritter M (1992) Risk society: towards a new modernity. Sage Publications, LondonGoogle Scholar
  4. Bernoulli D (1738) Specimen theoriae novae de mensura sortes. Commentarii Academiae Scientiarum Imprials Petropolitanae (in Latin), vol 5, pp 175–192. English translation by Sommer L (1954) Exposition of a new theory on the measurement of risk. Econometrica 22:23–36Google Scholar
  5. Birmingham L, McNeill D (2012) Strong in the rain: surviving Japan’s earthquake, tsunami, and Fukushima disaster. Palgrave MacmillanGoogle Scholar
  6. Bonanno GA (2011) Japan: too much trauma? Newsweek:8–9Google Scholar
  7. Diamond P, Rothschild M (eds) (1978) Uncertainty in economics: readings and exercises. Academic, New YorkGoogle Scholar
  8. Iwata K (1981) What are modern economists doing now? (in Japanese). Sci Thought 10:18–31Google Scholar
  9. Kahneman D, Tversky A (1979) Prospect theory: an analysis of decision under risk. Econometrica 47:1–21CrossRefGoogle Scholar
  10. Kahneman D, Slovic P, Tversky A (eds) (1982) Judgment under uncertainty: heuristics and biases. Cambridge University Press, CambridgeGoogle Scholar
  11. Keynes JM (1936) The general theory of employment, interest and money. Macmillan, LondonGoogle Scholar
  12. Knight FH (1921) Risk, uncertainty and profit. Houghton Mifflin Company, Boston/New YorkGoogle Scholar
  13. Koide H (2011) The lie and enigma of nuclear power generation (in Japanese). Huso Publishing Company, TokyoGoogle Scholar
  14. McCurry J (2016) Five years on: cleanup of Fukushima’s reactor remains a distant goal. The Guardian. March 2016Google Scholar
  15. McKie R (2011) Chernobyl 25 years on: a poisoned landscape. The Japan Times, April 2, 2011. Adapted from The Observer, April 2011Google Scholar
  16. Michel-Kerjan E, Slovic P (eds) (2010) The irrational economist: making decisions in a dangerous world. Public Affairs, New YorkGoogle Scholar
  17. Miyazawa K (1931) Ame nimo makezu (in Japanese). Private Notebook of Kenji Miyazawa. English Translation by Japan Medical Association (2011) Strong in the rain. Contained in Nabeshima N (ed) (2011) The galactic realm of Kenji Miyazawa. Ryukoku University Press, KyotoGoogle Scholar
  18. Ohshima K (2011) Cost of nuclear power generation (in Japanese). Iwanami Publishing Company, TokyoGoogle Scholar
  19. Oliphant R (2016) Chernobyl disaster: on the 30th anniversary of the nuclear accident: authorities plan for the next century. The Telegraph, April 2016Google Scholar
  20. Sakai Y (1982) The economics of uncertainty (in Japanese). Yuhikaku Publishing Conpany, TokyoGoogle Scholar
  21. Sakai Y (1991) Risk and information: towards a new economics (in Japanese). Keiso Publishing Company, TokyoGoogle Scholar
  22. Sakai Y (2004) Risk, environment, and economy (in Japanese). Keiso Publishing Company, TokyoGoogle Scholar
  23. Sakai Y (2006) Risk society: a pluralistic view (in Japanese). Iwanami Publishing Company, TokyoGoogle Scholar
  24. Sakai Y (2010) Economic thought of risk and uncertainty (in Japanese). Minerva Publishing Company, KyotoGoogle Scholar
  25. Sakai Y (2015) J.M. Keynes versus Frank Knight: comparing the two economic giants in the age of uncertainty (in Japanese). Minerva Publishing Company, KyotoGoogle Scholar
  26. Sakai Y (2016) J.M. Keynes versus F.H. Knight on uncertainty: reflections on the miracle year of 1921. Evol Inst Econ Rev 13(1):1–21CrossRefGoogle Scholar
  27. Sakai Y (2017) A risk economic approach to nuclear power generation: from Daniel Bernoulli to Keynes and Knight. CRR Discussion Paper A-23. Shiga University, Japan, pp 1–22Google Scholar
  28. Schumacher EF (1973) Small is Beautiful: economics as if people mattered. Blond & Briggs, LondonGoogle Scholar
  29. Slovic P (1987) Perception of risk. Science 236:36–51CrossRefGoogle Scholar
  30. Takagi J (1986) Nuclear power accident: will it take place in Japan? (in Japanese) Iwanami Publishing Company. Tokyo.Google Scholar
  31. Taleb NN (2007) The black swan: the impact of the highly improbable. Random House, New YorkGoogle Scholar
  32. Terada T (1934) Natural disaster and national defense (in Japanese). Keizai-Ohrai Journal, TokyoGoogle Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  • Yasuhiro Sakai
    • 1
  1. 1.Department of EconomicsCenter for Risk Research, Shiga UniversityHikoneJapan

Personalised recommendations