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Comparisons of Risk-based Decision Rules for the Application of Water Resources Planning and Management

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Abstract

Water resources planning and management are plagued with various uncertainties in that any chosen management alternative always has the possibility to be inferior to other competing alternatives. To facilitate risk-based decision making, the minimax expected opportunity loss (EOL) rule is applied for alternative selection. Two existing risk measures as well as EOL are compared and their implications in risk-based decision making are examined. It is shown that EOL can reflect more accurately the relative merit of two competing alternatives without suffering the pessimism and the counter-intuition of the other two risk measures considered herein. The minimax EOL rule is demonstrated through an application to a river basin management decision for improving the navigation. The results show that the correlation between outcomes of competing alternatives and decision maker’s acceptable risk are important in decision making under uncertainty.

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Acknowledgments

The study is supported by Hong Kong Research Grant Council for the project 620608 ‘Application of risk-based approach to hydrosystems.’

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Authors and Affiliations

  1. Research fellow, School of Civil and Environmental Engineering, Nanyang Technological University, Singapore, Singapore

    Hsin-Ting SU

  2. Professor, Department of Civil and Environmental Engineering, The Hong Kong University of Science and Technology, Hong Kong, China

    Yeou-Koung Tung

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  1. Hsin-Ting SU
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  2. Yeou-Koung Tung
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Correspondence to Hsin-Ting SU.

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SU, HT., Tung, YK. Comparisons of Risk-based Decision Rules for the Application of Water Resources Planning and Management. Water Resour Manage 28, 3921–3935 (2014). https://doi.org/10.1007/s11269-014-0718-8

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  • DOI: https://doi.org/10.1007/s11269-014-0718-8

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