TY - JOUR
T1 - Optimization of inputs in a spatially variable natural resource
T2 - Unconditional vs. conditional analysis
AU - Feinerman, Eli
AU - Bresler, Eshel
AU - Dagan, Gideon
PY - 1989/9
Y1 - 1989/9
N2 - Stochastic optimization of inputs in a spatially variable natural resource is studied, with special emphasis placed on the problem faced by a risk-averse decision maker (DM): how to use, in the best possible way, the given body of information, which is embodied in one realization of the relevant measurements. Two approaches, unconditional and conditional, are investigated and compared. The unconditional and the conditional stochastic optimization problems are defined and an illustrative numerical example is given. The principal conclusion drawn is that the conditional analysis has the potential to increase the DM's welfare substantially, as compared with the unconditional one.
AB - Stochastic optimization of inputs in a spatially variable natural resource is studied, with special emphasis placed on the problem faced by a risk-averse decision maker (DM): how to use, in the best possible way, the given body of information, which is embodied in one realization of the relevant measurements. Two approaches, unconditional and conditional, are investigated and compared. The unconditional and the conditional stochastic optimization problems are defined and an illustrative numerical example is given. The principal conclusion drawn is that the conditional analysis has the potential to increase the DM's welfare substantially, as compared with the unconditional one.
UR - http://www.scopus.com/inward/record.url?scp=45349111879&partnerID=8YFLogxK
U2 - 10.1016/0095-0696(89)90028-4
DO - 10.1016/0095-0696(89)90028-4
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AN - SCOPUS:45349111879
SN - 0095-0696
VL - 17
SP - 140
EP - 154
JO - Journal of Environmental Economics and Management
JF - Journal of Environmental Economics and Management
IS - 2
ER -