The Role of Ambiguity in the Evaluation of the Net Benefits of the MOSE System in the Venice Lagoon
AbstractIn this paper we apply the NEO-capacity framework to assess the role of ambiguity in a specific decision making problem. We first describe the framework and propose a graphical representation of the decision making functional. Then we apply it to a specific problem, namely, the role of ambiguity in the evaluation of the net benefits of the MOSE, the mobile barriers aimed to protect the Venice Lagoon from the periodic flooding (acqua alta). We show that the estimated impacts crucially depend on the level of optimism and pessimism of the decision maker and they substantially differ from the one calculated on the basis of the expected value. We also calculate the implicit ambiguity attitude of the decision maker.
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Bibliographic InfoPaper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0080.
Length: 32 pages
Date of creation: 2008
Date of revision:
Decision making under ambiguity; NEO-Capacity; MOSE; acqua alta;
Other versions of this item:
- Fontini, Fulvio & Umgiesser, Georg & Vergano, Lucia, 2010. "The role of ambiguity in the evaluation of the net benefits of the MOSE system in the Venice lagoon," Ecological Economics, Elsevier, vol. 69(10), pages 1964-1972, August.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-07-20 (Agricultural Economics)
- NEP-ALL-2008-07-20 (All new papers)
- NEP-UPT-2008-07-20 (Utility Models & Prospect Theory)
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