Changes between Version 2 and Version 3 of EwEugMaximizePortfolioUtility
 Timestamp:
 20101124 00:37:06 (9 years ago)
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EwEugMaximizePortfolioUtility
v2 v3 6 6 1. NPV is net present economic value of harvests, calculated as discounted sum over all fleets and times of catches times prices minus costs of fishing, ie the discounted total profit from fishing the ecosystem. 7 7 1. Slog(B) is an existence value index for all components of the ecosystem over time. It is calculated as the discounted sum over times and biomass pools of userentered Structure weights times logs of biomasses, scaled to pertime and perpool by dividing the sum by the number of simulation years and number of living biomass pools. 8 1. V is a variance measure for the prediction of log(NPV)+Slog(B). It is assumed to be proportional to how severely the ecosystem is disturbed away from the Ecopath base state, where disturbance is measured at each time in the simulation by the multidimensional distance of the ecosystem biomass state from the Ecopath base state. This term is negative, implying that increased uncertainty about the predictions for more severe disturbances causes a decrease in the mean of log(NPV); this term represents both aversion to management portfolio choices that have high variance in predicted returns, and the observation that the mean of the log of a random variable (NPV*PB) is approximately equal to the log of the mean of that variable minus ½ the variance of the variable. Large w3can be used to represent both high uncertainty about predictions that involve large deviations of biomass from the Ecopath base state, and strong risk aversion to policy choices that have high uncertainty.8 1. V is a variance measure for the prediction of log(NPV)+Slog(B). It is assumed to be proportional to how severely the ecosystem is disturbed away from the Ecopath base state, where disturbance is measured at each time in the simulation by the multidimensional distance of the ecosystem biomass state from the Ecopath base state. This term is negative, implying that increased uncertainty about the predictions for more severe disturbances causes a decrease in the mean of log(NPV); this term represents both aversion to management portfolio choices that have high variance in predicted returns, and the observation that the mean of the log of a random variable (NPV*PB) is approximately equal to the log of the mean of that variable minus 1/2 the variance of the variable. Large w,,3,, can be used to represent both high uncertainty about predictions that involve large deviations of biomass from the Ecopath base state, and strong risk aversion to policy choices that have high uncertainty. 9 9 10 10 This utility function combines several basic concepts of utility.