Prospect theory with a danish flavour

29 Apr 2017

Prospect theory is a behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known. The theory states that people make decisions based on the potential value of losses and gains rather than the final outcome. It is the work of Daniel Kahneman and Amos Tversky over a number of decades and resulted in a Nobel Memorial Prize in Economics. Key to there work was that when choosing among several alternatives, people avoid losses and optimize for sure wins because the pain of losing is greater than the satisfaction of an equivalent gain. This is known as loss aversion. Over the last few months the McMad Lab has been investigating the works of Daniel Kahneman and Amos Tversky, and have become really interested in how loss aversion translates to how we make decisions for conservation. Both from the perspective of the conservation science community and the general public.

 

We have been lucky enough to have the wonderful Professor Niels Strange, a natural resource economist, visiting us from the University of Copenhagen. His presence has given us the confidence to explore the above ideas further. In the coming months I hope our group will write our first group lab paper on this idea of loss aversion and conservation decisions. Below is an interview I did with Niels, so you can all get to know him a little better, just like we have all had the pleasure of doing over the last few months...............

 

What do you do for a living?

I work as a professor in Forest and Nature Management Planning at University of Copenhagen. I am part of the Danish National Research Foundation Center for Macroecology, Evolution and Climate (CMEC), as well as Department of Food and Resource Economics. I am teaching a number of courses on forest and nature planning- conservation and natural resource extraction, as well a few courses on ecosystem services – quantification and valuation. I am the Director of the European Erasmus Mundus Master Course of Excellence in Sustainable of Forest and Nature Management. University of Queensland (School of Biology) is a partner in the Master course.

 

What is your background?

I have a background in forestry, but has always been interested in conservation since my childhood. This is reflected in my education. I have a MSc in Forestry, a Phd in Forest and Environmental Planning, and a DSc. My research is for the most part related to biodiversity and conservation, but resting on environmental and natural resource economics as well as operations research.

 

Why are you visiting us?

I am visiting CEED to develop ideas around conservation and human behavior and conservation planning. Further to strengthen the collaboration on research and education between University of Queensland and University of Copenhagen 

 

And did you achieve that?

I have benefited from being placed in one of the world’s best research centers on biodiversity and conservation. It has been very inspiring .I definitely believe I have achieved what I was expecting from my stay here. 

What do you particularly like about working with the group?

It is always a privilege to work in a group of highly intelligent and dedicated people. It has been a fantastic experience to hear about all your awesome projects and visions for research. I further enjoyed the very pleasant and welcoming atmosphere

 

What was the most memorable moment during your visit?

Not sure, difficult to point at a specific moment. Some must include the new friendships and collaboration we build during my stay

 

What would you be doing if you weren’t in science?

I would probably be working with forestry and nature conservation in a private company or governmental agency 

 

What is the weirdest thing about Australia? 

Waking up the first night in Australia to the sound of 10 kookaburras just outside my bedroom.

 

 

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