Glossary


Best-estimate probability distributions:

  • Best estimated changes of things happening.

Common Pool Resources:

  • The expression “common pool resource” refers to things in the environment that are shared by a group of people (sometimes a whole population), and where no one is the exclusive owner of that thing. The air we breathe is a good example of that; water is also a good example, in places where the law prevents people from being private owners of water sources. The debates around common pool resources are related to the fact that some economic theories suggest that people care less about the conservancy of the resource in question, either because they may believe the resource is infinite when it is not, or because they believe that since everyone else is benefiting from using the resource, it makes no sense for one individual to make sacrifice and reduce her use of it, given that no one else will do the same and the resource will be consumed anyway. This dilemma is usually called the “tragedy of commons.” It is a controversial topic, because while many people believe that distributing property rights (that is, making people the private owners of the resource) would solve the problem, others say that this entails a commodification of nature that can have negative consequences for how societies relate to the environment. For instance, some people suggest that one of the causes of the depletion of natural resources is exactly only seeing them as economic resources, while in places where there are cultural or spiritual values associated to nature.


Decision architecture (or choice architecture):

  • The way a decision process is structured—including the order of options, the way they’re framed, the existence of any defaults, etc.—which can influence the decision maker’s final choice.  The field of decision architecture is based on the idea that preference is constructed, not revealed: we often don’t have stable, inherent preferences, but instead construct a current preference each time we’re asked.  Those constructed preferences might differ depending on the situation, the decision maker’s memories or mood, or the architecture of the decision space.


Description-experience gap:

  • The shift in perception of probability depending on whether it’s learned through written descriptions vs. personal experience is called the Description-Experience Gap. When people are told the probability of a rare event, for example, a 5% chance of a hurricane hitting their town this year, they tend to over-weight that probability.  They don’t overestimate it—they can still tell you that the probability is 5%—but when making decisions based on that probability, they act as if the probability is bigger than it really is (as if the hurricane were more likely to occur).  We call this method of using probability making “decisions from description.”  However, if people judge a probability for themselves based solely on their experience over time, they don’t over-weight the chances like they would if you described the probability to them.  Instead, people making “decisions from experience” tend to under-weight rare events.  So someone who has lived in Florida for 20 years and experienced a hurricane once (a 1 in 20 chance, or 5% chance of a hurricane) might be able to fairly accurately estimate their chances of seeing another hurricane as 5%, but would make decisions as if the chances were much smaller than 5%.


Deterministic game:

  • A game without uncertainty.


Index insurance:

  • Index insurance is a type of insurance intended to reduce the losses of farmers due to extreme weather events like drought or flood often associated with climate change. The insurance payouts are tied to weather events rather than crop failure which, reduces the overhead cost of insurance. For example, farmers will receive a payout when rainfall is below a specific level, as measured at a nearby rain gauge. The design of policies requires historical weather data, as well as detection technologies like weather stations.


Integrated Water Resource Management:

  • IWRM is a process which promotes the co-ordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems. IWRM is an empirical concept which was built up from the on-the-ground experience of practitioners. Although many parts of the concept have been around for several decades – in fact since the first global water conference in Mar del Plata in 1977 – it was not until after Agenda 21 and the World Summit on Sustainable Development in 1992 in Rio that the concept was made the object of extensive discussions as to what it means in practice. (Source: Integrated Water Resources Management in Action. WWAP, DHI Water Policy, UNEP-DHI Centre for Water and Environment. 2009)


Longitudinal field experiment:

  • A study in the field (i.e., not in the lab), using people in real-life situations, where the effects of certain interventions (the experimental manipulations) are measured not just once, but multiple times over a longer period of time. This type of study is usually done to investigate the long and short-term effects of certain interventions. This generally involves measuring the variables before the intervention and again after the intervention, but can also involve several measurements before and after the interventions.


Motivational deficit barrier:

  • When people are asked to identify behaviors that are most effective to decrease resource use, they may list easier actions for themselves and harder actions for others because they are unwilling to acknowledge the value of some of the more difficult effective actions, because of the inconvenience and effort required to implement these behaviors into their own lives.


Neuroeconomics:

  • An academic field that uses a combination of neuroscience, economics, and psychology to determine how individuals make decisions. A common technique of neuroeconomics is to have a person make decisions while sitting in a brain scanner. This way, we can see which parts of a person’s brain are used to make different decisions.


Pareto-optimum:

  • A state in which it is impossible to make one individual better off without making at least one individual worse off.


Participatory processes:

  • Participatory processes are methods used to encourage more democratic decision making and increase ownership and sustainability of development interventions. Participation has many advocates as well as critics (see, for example, Cooke and Kothari 2001; Hickey and Mohan 2005; Moore 2000; Peters 2000; Pottier 1997). Proponents argue that a wide range of benefits results from participation, such as improved understanding, ‘‘better’’ decisions in terms of efficiency or quality, greater equity, conflict mitigation, and sustainability (Michener 1998; Brody et al. 2003).” (P 97 Glenzer et al 2011). Concern with participation broadly indicates an interest, genuine or not, with making sure different voices are included in projects and discussions. However, in practice, even sincere efforts vary in the level of participation (which can simply mean advising people, not getting their feedback) and can face a variety of challenges that can prevent people from having any real say in the decisions at hand.


Posterior cingulate cortex:

  • A brain area in the back middle part of the brain. The function of this area is not well understood, but it is thought to serve as a connective hub between other brain regions and is involved in cognitive control and attention modulation. (See diagram)


Query Theory:

  • Query theory assumes that options are evaluated by sequential queries that retrieve different aspects of potentially relevant knowledge about the options. For example, one query might ask why one should choose the cheaper option, and a second query would then retrieve aspects supporting the more expensive option with the tax (or offset). An important prediction of query theory is that because of output interference, the order of queries matters. The first query typically generates a richer set of answers than the second; reversal of query order will therefore result in a different balance of evidence.


Regulatory Fit Theory:

  • People experience regulatory fit when their orientation toward a goal is supported by the way they pursue the goal. As an example, consider two people, one who thinks about the person he ideally would like to be and the other who thinks about the person she ought to be. When asked to choose between two objects, the first person will experience regulatory fit if he uses an eager strategy (by thinking about what he could gain), whereas the second will experience fit if she uses a vigilant strategy (by thinking about what she could lose). Fit/non-fit has important consequences. In this example, compared to people experiencing non-fit, those experiencing fit will place a much higher value on the object they choose.


Robust decision-making:

  • Robust decision-making (RDM) approaches seek to identify decisions that perform sufficiently well or, in other words, produce outcomes that are satisfactory over a broad range of likely future conditions or states of the world. By exploring the outcomes of alternative strategies – especially those leading to large losses – stakeholders can identify present and emerging vulnerabilities and design adaptive mechanisms to cope more effectively with uncertain futures.


Stochastic Game:

  • A series of normal form games that the agents play repeatedly, where the particular game depends probabilistically on the previous game played and the actions of the agents in the game


Ventral striatum:

  • A brain area in the middle bottom front of the brain. It processes rewards and pleasure, as well as addiction and aggression. (See diagram)


Ventromedial prefrontal cortex:

  • A brain area in the lower middle front part of the brain. It is used for decision making and emotion regulation. (Labeled VMPFC in this diagram)