TITLE

Repeated Experimentation to Learn About a Flow-Pollutant Threshold

AUTHOR(S)
Groeneveld, Rolf; Springborn, Michael; Costello, Christopher
PUB. DATE
August 2014
SOURCE
Environmental & Resource Economics;Aug2014, Vol. 58 Issue 4, p627
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
We examine in discrete time the management of a flow pollutant that causes damage when it crosses a fixed but unknown threshold. The manager sequentially chooses a pollution level that allows learning about the threshold, thereby improving future decisions. If crossed, damage can be reversed at some cost. We analyze the conditions under which experimentation is optimal, and explore how experimentation depends on restoration costs, information about the threshold, and the discount rate. Our results suggest that the level of experimentation, defined as the difference between the optimal activity with and without learning, is non-monotonic in costs and decreasing in the discount rate. We identify two stopping boundaries for the experiment, depending on cost levels compared to the lower bound of the threshold's interval. We show that when costs are high the stopping boundary under an infinite number of decisions is the same as when there are only two decision moments. A computational extension to more than two decisions suggests that an optimal sequence of experiments can cross the same threshold several times before experimentation ceases. These results shed light on a large class of environmental decision problems that has not been examined in the literature.
ACCESSION #
97012944

 

Related Articles

  • Normalized Markov Decision Chains I; Sensitive Discount Optimality. Rothblum, Uriel G. // Operations Research;Jul/Aug75, Vol. 23 Issue 4, p785 

    In this paper we study sensitive discount optimality criteria for finite state and action, discrete time parameter, stationary generalized Markov decision chains. We extend previous results obtained by Miller and Veinott and Veinott for substochastic transition matrices to arbitrary non-negative...

  • A discrete-time hazard model of a new golf course. Richard, Michael D.; Mitra, Kaushik; McMahon, Dave // Journal of Marketing Theory & Practice;Winter98, Vol. 6 Issue 1, p73 

    Focuses on a study which investigates the influence of several covariates on golf course choice behavior using a discrete-time hazard model. Information about the golf course choice behavior; Background information on the discrete-time hazard model; Methodology of the study; Results of the study.

  • The finiteness of the reward function and the optimal value function in Markov decision processes. Hu, Qiying; Xu, Chen // Mathematical Methods of Operations Research;1999, Vol. 49 Issue 2, p255 

    Abstract. This paper studies the discrete time Markov decision processes (MDP) with expected discounted total reward, where the state space is countable, the action space is measurable, the reward function is extended real-valued, and the discount rate may be any real number. Two conditions (GC)...

  • A note on system modelling and control in the case of conflicting objectives. Krajewski, Wieslaw // Annals of Operations Research;2000, Vol. 97 Issue 1-4, p91 

    The paper is concerned with the problem of system modelling in the case of many decision makers with conflicting goals. The suggested approach, preserving much of the tractability of the standard LQG problems, allows to take into account decision makers' risk attitudes.

  • ABOUT THE ENVIRONMENTAL MANAGEMENT SYSTEM APPLIED IN THE METALLURGICAL COMPANIES AND THE MONITORING PROCESS OF POLLUTANTS IN WASTE WATERS. Alexa, Vasile // Acta Technica Corvininesis - Bulletin of Engineering;Oct-Dec2012, Vol. 5 Issue 4, p107 

    The pollution monitoring is a necessary part of any environmental management system, being the basis for a fully informed decision-making process and developing environmental management strategies. To ensure a thorough decision, it is essential to be fully convinced that the measurements reflect...

  • Cooperative Game on Economic Management of Air Environment. Weihua Du // Journal of Sustainable Development;2011, Vol. 4 Issue 1, p225 

    Compound air pollution is becoming one of three major problems of urban ecological security in China which is experiencing a rapid growth. This paper is to establish optional points of Decision-making model and 10 portions of force model from two aspects on objective opportunity and subjective...

  • On the limits of the air pollution predictability: the case of the surface ozone at Athens, Greece. Varotsos, Costas; Efstathiou, Maria; Tzanis, Chris; Deligiorgi, Despina // Environmental Science & Pollution Research;Jan2012, Vol. 19 Issue 1, p295 

    Purpose: The aim of this study is to investigate the potential effects of increased urbanization in the Athens city, Greece on the intrinsic features of the temporal fluctuations of the surface ozone concentration (SOC). Methods: The detrended fluctuation analysis was applied to the mean monthly...

  • The Summarized Study of Heavy Metal Pollution in the City Soil. Ting Lu; Changchun Xu; Guangwei Pan; Yan Qin; Hong Tang // Applied Mechanics & Materials;2014, Issue 587-589, p842 

    Summarized the advance of research on biological effects of heavy metal pollution sources, city content in the soil, chemical forms of distribution, accumulation and pollution restoration in recent years, in order to provide reference for the related research, environmental decision-making and...

  • A process for evaluating anticipatory adaptation measures for climate chang Pitts, G. J.; Smith, J. B.; Ragland, S. E. // Water, Air & Soil Pollution;Nov1996, Vol. 92 Issue 1/2, p229 

    No abstract available.

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics