Implications for Decision Making and Environmental Policy
New Horizons in Environmental Economics series
Chapter 7: Methodology
7.1 INTRODUCTION The purpose of the case study examined in Chapter 6 is to assess whether Shackle’s theory can be operationalized in the context of environmental uncertainty. In designing a methodology to test the applicability of the Shackle model a deductive approach was taken, whereby the focus is on the questions of whether the model is useful in explaining the way that hard uncertainty is evaluated in environmental decisions and whether at an individual level actual behaviour is consistent with the key elements of the model outlined in Chapter 5. However, what cannot be assessed is whether an individual, when faced with hard uncertainty, approaches the decision process in a manner consistent with the Shackle model, as opposed to, for example, the expected utility (or variant) model.1 This issue has been dealt with earlier at a theoretical level. Although this section is primarily concerned with the design of a suitable methodology which will enable an evaluation of the behavioural or positive assumptions of the developed model, it is not advantageous completely to separate questions of what should happen from what does happen. Normative approaches, if they are to have any relevance, must recognize the limits of human cognitive ability, as well as the limits and realities inherent in decision-making structures and institutions. They must also be tempered by what is the best that the decision-making process can hope to achieve in given circumstances. This is particularly the case in situations of hard uncertainty where, as was argued in the previous...
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