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Finding Common Ground when Experts Disagree: Belief Dominance over Portfolios of Alternatives

Author

Listed:
  • Erin Baker

    (University of Massachusetts)

  • Valentina Bosetti

    (Bocconi University and Fondazione Eni Enrico Mattei (FEEM))

  • Ahti Salo

    (Aalto University)

Abstract

We address the problem of choosing a portfolio of policies under “deep uncertainty.” We introduce the idea of belief dominance as a way to derive a set of non-dominated portfolios and robust individual alternatives. Our approach departs from the tradition of providing a single recommended portfolio; rather, it derives a group of good portfolios. The belief dominance concept allows us to synthesize multiple expert- or model- based beliefs by uncovering the range of alternatives that are intelligent responses to the range of beliefs. This goes beyond solutions that are optimal for any specific set of beliefs to uncover other defensible solutions that may not otherwise be revealed. We illustrate our approach using an important problem in the climate change and energy policy context: choosing among clean energy technology R&D portfolios. We demonstrate how the belief dominance concept can reveal portfolios and alternatives that would otherwise remain uncovered.

Suggested Citation

  • Erin Baker & Valentina Bosetti & Ahti Salo, 2016. "Finding Common Ground when Experts Disagree: Belief Dominance over Portfolios of Alternatives," Working Papers 2016.46, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2016.46
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    References listed on IDEAS

    as
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    Cited by:

    1. Elena Verdolini & Laura Díaz Anadón & Erin Baker & Valentina Bosetti & Lara Aleluia Reis, 2018. "Future Prospects for Energy Technologies: Insights from Expert Elicitations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 133-153.

    More about this item

    Keywords

    Deep Uncertainty; Decision Making under Uncertainty; Robust; Dominance;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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