The precautionary principle in environmental policy and the theory of choice under uncertainty
John Quiggin ()
No WPM05_3, Murray-Darling Program Working Papers from Risk and Sustainable Management Group, University of Queensland
The precautionary principle, presented as a guide to environmental policy decisions in the presence of uncertainty, has been the subject of vigorous debate. However, the has generally not been discussed in relation to formal theories of choice under uncertainty developed as generalizations of the expected utility model. In this paper, it is argued that a formal basis for the precautionary principle may be found in an incompleteness hypothesis regarding formal models of choice under uncertainty. The incompleteness hypothesis states that estimates derived from formal models of choice under uncertainty will generally be over-optimistic and that the errors will be greater, the less well-understood is the problem in question.
Keywords: precautionary principle; generalized expected utility theory (search for similar items in EconPapers)
JEL-codes: D81 Q2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-env
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Working Paper: The Precautionary Principle in Environmental Policy and the Theory of Choice under Uncertainty (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:rsm:murray:m05_3
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