Abstract
This chapter purports to derive the conditions of paretooptimal physical safety efforts. Again, let us begin with a single facility equally threatening the lives of the community members. From chapter B.II. we can conjecture that the necessary condition for a (non-corner) optimal solution, i.e. without any potential Pareto-improvement is:1
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The society-wide marginal option price for Φ- reductions must equal the marginal cost of this reduction.
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The society-wide marginal option price for θ- reductions must equal the marginal cost of this reduction.
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© 1993 Physica-Verlag Heidelberg
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Querner, I. (1993). Optimal Provision of Physical Safety. In: An Economic Analysis of Severe Industrial Hazards. Microeconomic Studies. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-95898-4_10
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DOI: https://doi.org/10.1007/978-3-642-95898-4_10
Publisher Name: Physica-Verlag HD
Print ISBN: 978-3-7908-0678-6
Online ISBN: 978-3-642-95898-4
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