Environmental and Resource Economics

, Volume 45, Issue 3, pp 379–404 | Cite as

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

Article

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 

JEL Classification

D81 Q20 

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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of CreteRethymnoGreece
  2. 2.Department of International and European Economic Studies and Beijer FellowAthens University of Economics and BusinessAthensGreece

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