A decision theoretical approach to identify optimal risk mititgation strategies

Communities living in mountain areas are increasingly affected by considerable damage to infrastructure and property as a consequence of flood impacts. The conception of effective flood risk mitigation strategies and their subsequent implementation is therefore essential for a continuing sustainable development in mountain areas. Effective flood risk mitigation strategies can be assessed by their expected utility, which allows the selection of optimal management strategies from a normative point of view. The objective of this paper is to present the underlying procedure, and to derive formal expressions to measure risk mitigation performance starting from the basic theorem of rational choice under risk. Moreover, an overview of existing economic valuation approaches to attach monetary values to the elements at risk is provided.