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Allocating Resources in an Uncertain World: Water Management and Endangered Species
Author(s) -
Woodward Richard T.,
Shaw W. Douglass
Publication year - 2008
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2008.01141.x
Subject(s) - endangered species , threatened species , knight , work (physics) , decision maker , control (management) , distribution (mathematics) , computer science , environmental resource management , economics , ecology , habitat , management science , mathematics , biology , mechanical engineering , physics , astronomy , artificial intelligence , engineering , mathematical analysis
Instream flows may be essential in protecting aquatic species that are threatened or endangered. An economic model of the optimal allocation of water under pure uncertainty is developed, with particular attention paid to the situation when a species characterized by critical depensation is affected by instream flows. We adopt the notion of pure uncertainty that Frank Knight and Daniel Ellsberg intended, which applies when decision makers cannot reduce their uncertainty to a unique probability distribution. Following recent work by Hansen, Sargent, and others, we employ robust control as a way to deal with this problem.