Model Uncertainty, Ambiguity and the Precautionary Principle: Implications for Biodiversity Management
AbstractWe analyze ecosystem management under `unmeasurable' Knightian uncertainty or ambiguity which, given the uncertainties characterizing ecosystems, might be a more appropriate framework relative to the classic risk case (measurable uncertainty). This approach is used as a formal way of modelling the precautionary principle in the context of least favorable priors and maxmin criteria. We provide biodiversity management rules which incorporate the precautionary principle. These rules take the form of either safety margins and minimum safety standards or optimal harvesting under precautionary approaches.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10236.
Date of creation: 10 Aug 2008
Date of revision:
Knightian uncertainty; ambiguity; risk; precautionary principle; biodiversity management; optimal harvesting; robust control;
Other versions of this item:
- Giannis Vardas & Anastasios Xepapadeas, 2010. "Model Uncertainty, Ambiguity and the Precautionary Principle: Implications for Biodiversity Management," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(3), pages 379-404, March.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-09-05 (Agricultural Economics)
- NEP-ALL-2008-09-05 (All new papers)
- NEP-ENV-2008-09-05 (Environmental Economics)
- NEP-RES-2008-09-05 (Resource Economics)
- NEP-UPT-2008-09-05 (Utility Models & Prospect Theory)
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