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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alexei Onatski & Noah Williams, 2003.
"Modeling Model Uncertainty,"
Journal of the European Economic Association,
MIT Press, vol. 1(5), pages 1087-1122, 09.
- Alexei Onatski & Noah Williams, 2002. "Modeling model uncertainty," Discussion Papers 0203-05, Columbia University, Department of Economics.
- Alexei Onatski & Noah Williams, 2003. "Modeling Model Uncertainty," NBER Working Papers 9566, National Bureau of Economic Research, Inc.
- Onatski, Alexei & Williams, Noah, 2002. "Modeling model uncertainty," Working Paper Series 0169, European Central Bank.
- Giannis Vardas & Anastasios Xepapadeas, 2007. "Uncertainty Aversion, Robust Control And Asset Holdings With A Stochastic Investment Opportunity Set," International Journal of Theoretical and Applied Finance (IJTAF), World Scientific Publishing Co. Pte. Ltd., vol. 10(06), pages 985-1014.
- Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier.
- Brock,W. & Xepapadeas,A., 2002. "Regulating nonlinear environmental systems under Knightian uncertainty," Working papers 8, Wisconsin Madison - Social Systems.
- Epstein Larry G. & Wang Tan, 1995. "Uncertainty, Risk-Neutral Measures and Security Price Booms and Crashes," Journal of Economic Theory, Elsevier, vol. 67(1), pages 40-82, October.
- Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
- Thomas J. Sargent & LarsPeter Hansen, 2001. "Robust Control and Model Uncertainty," American Economic Review, American Economic Association, vol. 91(2), pages 60-66, May.
- Tisdell, Clement A., 2010. "Conservation Value," Economics, Ecology and Environment Working Papers 90879, University of Queensland, School of Economics.
- Magill, Michael J. P., 1977. "A local analysis of N-sector capital accumulation under uncertainty," Journal of Economic Theory, Elsevier, vol. 15(1), pages 211-219, June.
- Epstein, Larry G & Wang, Tan, 1994. "Intertemporal Asset Pricing Under Knightian Uncertainty," Econometrica, Econometric Society, vol. 62(2), pages 283-322, March.
- William Brock & Anastasios Xepapadeas & Athanasios Yannacopoulos, 2014. "Optimal Control in Space and Time and the Management of Environmental Resources," DEOS Working Papers 1402, Athens University of Economics and Business.
- Michael Funke & Yu-Fu Chen & Nicole Glanemann, 2011.
"Dark Clouds or Silver Linings? Knightian Uncertainty and Climate Change,"
Quantitative Macroeconomics Working Papers
21107, Hamburg University, Department of Economics.
- Yu-Fu Chen & Michael Funke & Nicole Glanemann, 2011. "Dark Clouds or Silver Linings? Knightian Uncertainty and Climate Change," CESifo Working Paper Series 3516, CESifo Group Munich.
- Chen, Yu-Fu & Funke, Michael & Glanemann, Nicole, 2011. "Dark Clouds or Silver Linings? Knightian Uncertainty and Climate Change," SIRE Discussion Papers 2011-64, Scottish Institute for Research in Economics (SIRE).
- Yu-Fu Chen & Michael Funke & Nicole Glanemann, 2011. "Dark Clouds or Silver Linings? Knightian Uncertainty and Climate Change," Dundee Discussion Papers in Economics 258, Economic Studies, University of Dundee.
- Stergios Athanassoglou & Anastasios Xepapadeas, .
"Pollution control: when, and how, to be precautious,"
DEOS Working Papers
1112, Athens University of Economics and Business.
- Stergios Athanassoglou & Anastasios Xepapadeas, 2011. "Pollution Control: When, and How, to be Precautious," Working Papers 2011.18, Fondazione Eni Enrico Mattei.
- Gren, Ing-Marie & Baxter, Peter & Mikusinski, Grzegorz & Possingham, Hugh, 2014. "Cost-effective biodiversity restoration with uncertain growth in forest habitat quality," Journal of Forest Economics, Elsevier, vol. 20(1), pages 77-92.
- Anastasios Xepapadeas & Catarina Roseta-Palma, 2013. "Instabilities and robust control in natural resource management," Portuguese Economic Journal, Springer, vol. 12(3), pages 161-180, December.
- Pauline Barrieu & Sinclair Desgagné, 2009. "Economic policy when models disagree," Grantham Research Institute on Climate Change and the Environment Working Papers 4, Grantham Research Institute on Climate Change and the Environment.
- Hennlock, Magnus, 2009. "Robust Control in Global Warming Management: An Analytical Dynamic Integrated Assessment," Working Papers in Economics 354, University of Gothenburg, Department of Economics.
- Hennlock, Magnus, 2009. "Robust Control in Global Warming Management: An Analytical Dynamic Integrated Assessment," Discussion Papers dp-09-19, Resources For the Future.
- Leizarowitz, Arie & Tsur, Yacov, 2012. "Renewable resource management with stochastic recharge and environmental threats," Journal of Economic Dynamics and Control, Elsevier, vol. 36(5), pages 736-753.
- Pauline Barrieu & Bernard Sinclair-Desgagné, 2009.
"Economic Policy when Models Disagree,"
CIRANO Working Papers
- Tsur, Yacov & Zemel, Amos, 2012. "Dynamic and stochastic analysis of environmental and natural resources," Discussion Papers 120017, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
- Athanassoglou, Stergios & Xepapadeas, Anastasios, 2012. "Pollution control with uncertain stock dynamics: When, and how, to be precautious," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 304-320.
- Konstantinos Angelopoulos & George Economides & Apostolis Philippopoulos, 2012. "Public Good Provision with Robust Decision Making," CESifo Working Paper Series 3996, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.