ABSTRACT
Economists and other researchers have examined decision making under uncertainty in thousands of papers. The vast majority of this work has focused on situations where uncertainty can be described with some known probability. There is no consensus normative or positive theory of behavior regarding decision making under “hard” uncertainty, where the probabilities of a set of events occurring are unknown. This chapter uses induced-value experiments to explore several theories of decision making under hard uncertainty. Improving our understanding of decision making under hard uncertainty may have important implications for complex environmental policy (e.g. protection of endangered species and biodiversity, and global climate change).
