Model Uncertainty, Ambiguity and the Precautionary Principle: Implications for Biodiversity Management

Giannis Vardas () and Anastasios Xepapadeas ()

MPRA Paper from University Library of Munich, Germany

Abstract: We 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.

Keywords: Knightian uncertainty; ambiguity; risk; precautionary principle; biodiversity management; optimal harvesting; robust control. (search for similar items in EconPapers)
JEL-codes: D81 Q20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-env, nep-res and nep-upt
Date: 2008-08-10
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:10236

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