Rosenthal and Peter Schmeidler for comments on an earlier draft of this paper as well as two anonymous referees. An earlier version of this paper was presented at a conference on

This article makes the case for relying on decentralized market-based incentive mechanisms to supplement performance-based regulations for promoting industrial safety. In particular, we examine how third-party inspections, coupled with insurance protection, can encourage firms to reduce their risks from accidents and disasters. Our proposal is thus an example of a management-based regulatory strategy where the locus of decision making is shifted from the regulator to firms, which are now required to do their own planning as to how they will meet a set of standards or regulations

This paper examines possible barriers to securitization, focusing on behavioral responses to such novel instruments. These barriers include the difficulties of conveying the associated risks, even to investors who are sophisticated about finance (but still uncertain about model risk and structural uncertainties). Our analyses will draw on results in behavioral decision making and psychology. They will lead to proposals for empirical research and general strategies for making securities design more consonant with investor behavior.

Critical infrastructures are complex societal systems. For that reason, risk criteria for critical infrastructures are also "part"of the risk criteria for complex societal systems. The questions to be resolved are 1. are the societal risk criteria of complex systems defined and quantifiable 2. is known how the risk criteria of critical infrastructures relate to the risk criteria of the complex system as a whole.

Historically, human civilisations have striven to protect themselves against natural and man-made hazards. The degree of protection is a matter of political choice. Today this choice should be expressed in terms of risk and acceptable probability of failure to form the basis of the probabilistic design of the protection. It is additionally argued that the choice for a certain technology and the connected risk is made in a costbenefit framework. The benefits and the costs including risk are weighed in the decision process. A set of rules for the evaluation of risk is proposed and tested in cases. The set of rules leads to technical advice in a question that has to be decided politically. © 1998 Elsevier Science Limited. 1

The level of safety investments can be argued to vary between sectors. The safety investments legally required and carried out within the railway sector indicate that there is a higher implicit value in preventing a fatality within the rail sector than within the road sector. The literature overview discusses factors possibly influencing individuals ’ perception of risk and their willingness to trade risk for money. The study seeks to combine results, from e.g. the field of psychological studies, with work performed by economists in order to analyse whether the value of preventing a statistical life used in the road traffic sector can be argued to differ from the value used in the railway sector. The research discussed here indicates that the use of different values may be theoretically motivated. However, empirical findings presented do not confirm that the value of a statistical life used in the railway sector is many times larger than that used in the road sector. Research indicates, furthermore, that the variation of perceived risk within the context of one traffic mode may be as large as, or even larger than, the variation between different traffic contexts. The result implies that studies estimating the value of a statistical life should focus not only on disparities between transport modes per se but also on disparities between accident types.

Valuation of benefits of health and