Abstract
A key tool in the modern analysis of policy is benefit-cost analysis. Though its origin goes back to the remarkably prescient paper of Dupuit, 1844, its theoretical development came much later, after the “marginal revolution” of the 1870’s, and its practical application really dates only from the period after 1950. The underlying theory is that of notion of economic surplus, to which, after Dupuit, such major figures as Marshall, Pareto, Hotelling, Allais, and Debreu have contributed: for a remarkable synthesis, see Allais, 1981.
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Arrow, K.J. (1983). Behavior under Uncertainty and Its Implications for Policy. In: Stigum, B.P., Wenstøp, F. (eds) Foundations of Utility and Risk Theory with Applications. Theory and Decision Library, vol 37. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-1590-4_3
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DOI: https://doi.org/10.1007/978-94-017-1590-4_3
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