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Uncertainty and the Environment

Implications for Decision Making and Environmental Policy

Richard Young

This thought provoking book is concerned with the need to deal adequately with uncertainty in environmental decision making. The author advances a critique of the use of traditional models and then develops an alternative model of decision making under uncertainty, based on the work of George Shackle.
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Chapter 8: Results of the Application of the Shackle Model

Richard Young


8.1 INTRODUCTION This chapter presents evidence of whether the behaviour of the individuals interviewed is consistent with the key propositions of the model. These propositions centre on the evaluation of the outcomes in terms of degree of potential surprise as well as the existence of an ascendancy function. In terms of potential surprise the specific assumptions on which evidence is provided include: that potential surprise reflects the belief that the individual has in the occurrence of the outcome; the extent to which any of the axioms for potential surprise (as described in Section are supported; and whether potential surprise was treated as a continuous or binary measure of uncertainty. In terms of the existence of the ascendancy function, evidence is provided on: the consistency of the coefficients of the potential surprise and outcome variables with that of theory; the overall explanatory power of the ascendancy function; the difference between the ascendancy/weighting function over gains and losses; the difference of the coefficients between the individuals; the significance of the potential surprise and outcome variable; and the role of the ascendancy function as a sifting device by means of which the individual decision maker focuses on one gain and one loss outcome respectively. In Section 8.3 the Shackle model is then applied at a more general level in an attempt to explain the way that uncertainty is evaluated in institutions such as the Inter-American Development Bank and the World Bank. In this chapter the results from...

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