Does uncertainty cause inertia in decision making? An experimental study of the role of regret aversion and indecisiveness

Previous research has shown that often there is clear inertia in individual decision making---that is, a tendency for decision makers to choose a status quo option. I conduct a laboratory experiment to investigate two potential determinants of inertia in uncertain environments: (i) regret aversion and (ii) ambiguity-driven indecisiveness. I use a between-subjects design with varying conditions to identify the effects of these two mechanisms on choice behavior. In each condition, participants choose between two simple real gambles, one of which is the status quo option. I find that inertia is quite large and that both mechanisms are equally important.

Variation in the global-scale impacts of climate change on crop productivity due to climate model uncertainty and adaptation

Crop production is inherently sensitive to fluctuations in weather and climate and is expected to be impacted by climate change. To understand how this impact may vary across the globe many studies have been conducted to determine the change in yield of several crops to expected changes in climate. Changes in climate are typically derived from a single to no more than a few General Circulation Models (GCMs). This study examines the uncertainty introduced to a crop impact assessment when 14 GCMs are used to determine future climate. The General Large Area Model for annual crops (GLAM) was applied over a global domain to simulate the productivity of soybean and spring wheat under baseline climate conditions and under climate conditions consistent with the 2050s under the A1B SRES emissions scenario as simulated by 14 GCMs. Baseline yield simulations were evaluated against global country-level yield statistics to determine the model's ability to capture observed variability in production. The impact of climate change varied between crops, regions, and by GCM. The spread in yield projections due to GCM varied between no change and a reduction of 50%. Without adaptation yield response was linearly related to the magnitude of local temperature change. Therefore, impacts were greatest for countries at northernmost latitudes where warming is predicted to be greatest. However, these countries also exhibited the greatest potential for adaptation to offset yield losses by shifting the crop growing season to a cooler part of the year and/or switching crop variety to take advantage of an extended growing season. The relative magnitude of impacts as simulated by each GCM was not consistent across countries and between crops. It is important, therefore, for crop impact assessments to fully account for GCM uncertainty in estimating future climates and to be explicit about assumptions regarding adaptation.

Innovations for enabling urban climate governance: evidence from Mumbai

Climate change is a ‘wicked’ problem. No central authority manages climate change, and those creating the problem are also trying to solve it. Climate change brings uncertainty in ways that cities have not tackled previously. There is a need to explore new governance forms able to deal with change and to enable transformations. In this paper we explore seven local climate innovations to better understand the enabling conditions underpinning success and the governance barriers that are encountered. We connect the more formal and emergent climate governance ‘innovations’ through adaptation and mitigation experiments in Mumbai, India. Case studies indicate an emerging development model. Effective climate governance has to be an inevitable part of new development in the South. While climate externality exists in all development planning and implementation, smaller community-level efforts indicate how opportunities are offered within existing systems to integrate with larger institutional climate governance.

Forecasting US output growth with non-linear models in the presence of data uncertainty

We consider the impact of data revisions on the forecast performance of a SETAR regime-switching model of U.S. output growth. The impact of data uncertainty in real-time forecasting will affect a model's forecast performance via the effect on the model parameter estimates as well as via the forecast being conditioned on data measured with error. We find that benchmark revisions do affect the performance of the non-linear model of the growth rate, and that the performance relative to a linear comparator deteriorates in real-time compared to a pseudo out-of-sample forecasting exercise.

Robustness despite uncertainty: regional climate data reveal the dominant role of humans in explaining global extinctions of Late Quaternary megafauna

Debate over the late Quaternary megafaunal extinctions has focussed on whether human colonisation or climatic changes were more important drivers of extinction, with few extinctions being unambiguously attributable to either. Most analyses have been geographically or taxonomically restricted and the few quantitative global analyses have been limited by coarse temporal resolution or overly simplified climate reconstructions or proxies. We present a global analysis of the causes of these extinctions which uses high-resolution climate reconstructions and explicitly investigates the sensitivity of our results to uncertainty in the palaeological record. Our results show that human colonisation was the dominant driver of megafaunal extinction across the world but that climatic factors were also important. We identify the geographic regions where future research is likely to have the most impact, with our models reliably predicting extinctions across most of the world, with the notable exception of mainland Asia where we fail to explain the apparently low rate of extinction found in in the fossil record. Our results are highly robust to uncertainties in the palaeological record, and our main conclusions are unlikely to change qualitatively following minor improvements or changes in the dates of extinctions and human colonisation.

Adaptive governance: livelihood innovation for climate resilience in Uganda

Adaptive governance is the use of novel approaches within policy to support experimentation and learning. Social learning reflects the engagement of interdependent stakeholders within this learning. Much attention has focused on these concepts as a solution for resilience in governing institutions in an uncertain climate; resilience representing the ability of a system to absorb shock and to retain its function and form through reorganisation. However, there are still many questions to how these concepts enable resilience, particularly in vulnerable, developing contexts. A case study from Uganda presents how these concepts promote resilient livelihood outcomes among rural subsistence farmers within a decentralised governing framework. This approach has the potential to highlight the dynamics and characteristics of a governance system which may manage change. The paper draws from the enabling characteristics of adaptive governance, including lower scale dynamics of bonding and bridging ties and strong leadership. Central to these processes were learning platforms promoting knowledge transfer leading to improved self-efficacy, innovation and livelihood skills. However even though aspects of adaptive governance were identified as contributing to resilience in livelihoods, some barriers were identified. Reflexivity and multi-stakeholder collaboration were evident in governing institutions; however, limited self-organisation and vertical communication demonstrated few opportunities for shifts in governance, which was severely challenged by inequity, politicisation and elite capture. The paper concludes by outlining implications for climate adaptation policy through promoting the importance of mainstreaming adaptation alongside existing policy trajectories; highlighting the significance of collaborative spaces for stakeholders and the tackling of inequality and corruption.

One step forward, and two steps back: women and career progression in academia during times of uncertainty

While there is an extensive and still growing body of literature on women in academia and the challenges they encounter in career progression, there is little research on their experience specifically within a business school setting. In this study, we attempt to address this gap and examine the experiences and career development of female academics in a business school and how these are impacted by downsizing programmes. To this end, an exploratory case study is conducted. The findings of this study show that female business school academics experience numerous challenges in terms of promotion and development, networking, and the multiple and conflicting demands placed upon them. As a result, the lack of visibility seems to be a pertinent issue in terms of their career progression. Our data also demonstrates that that, paradoxically, during periods of downsizing women become more visible and thus vulnerable to layoffs as a consequence of the challenges and pressures created in their environment during this process. In this paper, we argue that this heightened visibility, and being subject to possible layoffs, further reproduces inequality regimes in academia.

Estimation of Parameters in Random Effect Models with Incidence Matrix Uncertainty

Random effect models have been widely applied in many fields of research. However, models with uncertain design matrices for random effects have been little investigated before. In some applications with such problems, an expectation method has been used for simplicity. This method does not include the extra information of uncertainty in the design matrix is not included. The closed solution for this problem is generally difficult to attain. We therefore propose an two-step algorithm for estimating the parameters, especially the variance components in the model. The implementation is based on Monte Carlo approximation and a Newton-Raphson-based EM algorithm. As an example, a simulated genetics dataset was analyzed. The results showed that the proportion of the total variance explained by the random effects was accurately estimated, which was highly underestimated by the expectation method. By introducing heuristic search and optimization methods, the algorithm can possibly be developed to infer the 'model-based' best design matrix and the corresponding best estimates.

Quantification of geological uncertainty and risk using stochastic simulation and applications in the coal mining industry

Stochastic simulation is a recognised tool for quantifying the spatial distribution of geological uncertainty and risk in earth science and engineering. Metals mining is an area where simulation technologies are extensively used; however, applications in the coal mining industry have been limited. This is particularly due to the lack of a systematic demonstration illustrating the capabilities these techniques have in problem solving in coal mining. This paper presents two broad and technically distinct areas of applications in coal mining. The first deals with the use of simulation in the quantification of uncertainty in coal seam attributes and risk assessment to assist coal resource classification, and drillhole spacing optimisation to meet pre-specified risk levels at a required confidence. The second application presents the use of stochastic simulation in the quantification of fault risk, an area of particular interest to underground coal mining, and documents the performance of the approach. The examples presented demonstrate the advantages and positive contribution stochastic simulation approaches bring to the coal mining industry

Introducing uncertainty into pattern discovery in temporal event sequences

Pattern discovery in temporal event sequences is of great importance in many application domains, such as telecommunication network fault analysis. In reality, not every type of event has an accurate timestamp. Some of them, defined as inaccurate events may only have an interval as possible time of occurrence. The existence of inaccurate events may cause uncertainty in event ordering. The traditional support model cannot deal with this uncertainty, which would cause some interesting patterns to be missing. A new concept, precise support, is introduced to evaluate the probability of a pattern contained in a sequence. Based on this new metric, we define the uncertainty model and present an algorithm to discover interesting patterns in the sequence database that has one type of inaccurate event. In our model, the number of types of inaccurate events can be extended to k readily, however, at a cost of increasing computational complexity.

Uncertainty and the influence of group norms in the attitude-behaviour relationship

Two studies were conducted to examine the impact of subjective uncertainty on conformity to group norms in the attitude-behaviour context. In both studies, subjective uncertainty was manipulated using a deliberative mindset manipulation (McGregor, Zanna, Holmes, & Spencer, 2001). In Study 1 (N = 106), participants were exposed to either an attitude-congruent or an attitude-incongruent in-group norm. In Study 2(N = 83), participants were exposed to either a congruent, incongruent, or an ambiguous in-group norm. Ranges of attitude-behaviour outcomes, including attitude-intention consistency and change in attitude-certainty, were assessed. In both studies, levels of group-normative behaviour varied as a function of uncertainty condition. In Study 1, conformity to group norms, as evidenced by variations in the level of attitude-intention consistency, was observed only in the high uncertainty condition. In Study 2, exposure to an ambiguous norm had different effects for those in the low and die high uncertainty conditions. In the low uncertainty condition, greatest conformity was observed in the attitude-congruent norm condition compared with an attitude-congruent or ambiguous norm. In contrast, individuals in the high uncertainty condition displayed greatest conformity when exposed to either an attitude-congruent or an ambiguous in-group norm. The implications of these results for the role of subjective uncertainty in social influence processes are discussed. © 2007 The British Psychological Society.

Uncertainty analysis in the Model Web

This thesis provides a set of tools for managing uncertainty in Web-based models and workflows.To support the use of these tools, this thesis firstly provides a framework for exposing models through Web services. An introduction to uncertainty management, Web service interfaces,and workflow standards and technologies is given, with a particular focus on the geospatial domain.An existing specification for exposing geospatial models and processes, theWeb Processing Service (WPS), is critically reviewed. A processing service framework is presented as a solutionto usability issues with the WPS standard. The framework implements support for Simple ObjectAccess Protocol (SOAP), Web Service Description Language (WSDL) and JavaScript Object Notation (JSON), allowing models to be consumed by a variety of tools and software. Strategies for communicating with models from Web service interfaces are discussed, demonstrating the difficultly of exposing existing models on the Web. This thesis then reviews existing mechanisms for uncertainty management, with an emphasis on emulator methods for building efficient statistical surrogate models. A tool is developed to solve accessibility issues with such methods, by providing a Web-based user interface and backend to ease the process of building and integrating emulators. These tools, plus the processing service framework, are applied to a real case study as part of the UncertWeb project. The usability of the framework is proved with the implementation of aWeb-based workflow for predicting future crop yields in the UK, also demonstrating the abilities of the tools for emulator building and integration. Future directions for the development of the tools are discussed.

Degree of vertical integration and its buffering effects on political uncertainty

The focus of this study is on the governance decisions in a concurrent channels context, in the case of uncertainty. The study examines how a firm chooses to deploy its sales force in times of uncertainty, and the subsequent performance outcome of those deployment choices. The theoretical framework is based on multiple theories of governance, including transaction cost analysis (TCA), agency theory, and institutional economics. Three uncertainty variables are investigated in this study. The first two are demand and competitive uncertainty which are considered to be industry-level market uncertainty forms. The third uncertainty, political uncertainty, is chosen as it is an important dimension of institutional environments, capturing non-economic circumstances such as regulations and political systemic issues. The study employs longitudinal secondary data from a Thai hotel chain, comprising monthly observations from January 2007 – December 2012. This hotel chain has its operations in 4 countries, Thailand, the Philippines, United Arab Emirates – Dubai, and Egypt, all of which experienced substantial demand, competitive, and political uncertainty during the study period. This makes them ideal contexts for this study. Two econometric models, both deploying Newey-West estimations, are employed to test 13 hypotheses. The first model considers the relationship between uncertainty and governance. The second model is a version of Newey-West, using an Instrumental Variables (IV) estimator and a Two-Stage Least Squares model (2SLS), to test the direct effect of uncertainty on performance and the moderating effect of governance on the relationship between uncertainty and performance. The observed relationship between uncertainty and governance observed follows a core prediction of TCA; that vertical integration is the preferred choice of governance when uncertainty rises. As for the subsequent performance outcomes, the results corroborate that uncertainty has a negative effect on performance. Importantly, the findings show that becoming more vertically integrated cannot help moderate the effect of demand and competitive uncertainty, but can significantly moderate the effect of political uncertainty. These findings have significant theoretical and practical implications, and extend our knowledge of the impact on uncertainty significantly, as well as bringing an institutional perspective to TCA. Further, they offer managers novel insight into the nature of different types of uncertainty, their impact on performance, and how channel decisions can mitigate these impacts.

Quantifying the effects of temperature and concentration on variable-density flow in numerical modeling of groundwater systems: Implications for predictive uncertainty and data collection

Groundwater systems of different densities are often mathematically modeled to understand and predict environmental behavior such as seawater intrusion or submarine groundwater discharge. Additional data collection may be justified if it will cost-effectively aid in reducing the uncertainty of a model's prediction. The collection of salinity, as well as, temperature data could aid in reducing predictive uncertainty in a variable-density model. However, before numerical models can be created, rigorous testing of the modeling code needs to be completed. This research documents the benchmark testing of a new modeling code, SEAWAT Version 4. The benchmark problems include various combinations of density-dependent flow resulting from variations in concentration and temperature. The verified code, SEAWAT, was then applied to two different hydrological analyses to explore the capacity of a variable-density model to guide data collection. ^ The first analysis tested a linear method to guide data collection by quantifying the contribution of different data types and locations toward reducing predictive uncertainty in a nonlinear variable-density flow and transport model. The relative contributions of temperature and concentration measurements, at different locations within a simulated carbonate platform, for predicting movement of the saltwater interface were assessed. Results from the method showed that concentration data had greater worth than temperature data in reducing predictive uncertainty in this case. Results also indicated that a linear method could be used to quantify data worth in a nonlinear model. ^ The second hydrological analysis utilized a model to identify the transient response of the salinity, temperature, age, and amount of submarine groundwater discharge to changes in tidal ocean stage, seasonal temperature variations, and different types of geology. The model was compared to multiple kinds of data to (1) calibrate and verify the model, and (2) explore the potential for the model to be used to guide the collection of data using techniques such as electromagnetic resistivity, thermal imagery, and seepage meters. Results indicated that the model can be used to give insight to submarine groundwater discharge and be used to guide data collection. ^