Integrating Behavioral Theories in Agent-Based Models for Agricultural Drought Risk Assessments

Abstract

Improving assessments of droughts risk for smallholder farmers requires a better understanding of the interaction between individual adaptation decisions and drought risk. Agent-based modeling is increasingly used to capture the interaction between individual decision-making and the environment. In this paper, we provide a review of drought risk agent-based models with a focus on behavioral rules. This review leads to the conclusion that human decision rules in existing drought risk agent-based models are often based on ad hoc assumptions without a solid theoretical and empirical foundation. Subsequently, we review behavioral economic and psychological theories to provide a clear overview of theories that can improve the theoretical foundation of smallholder farmer behavior and we review empirical parameterization, calibration, and validation methods of those theories. Based on these reviews, we provide a conceptual framework that can give guidance for the integration of behavioral theories in agent-based models. We conclude with an agenda to guide future research in this field.

Improving the Representation of Climate Change Adaptation Behaviour in New Zealand’s Forest Growing Sector

“…Models also need to incorporate risk preferences and perceptions as motivations for adaptation or maladaptation [1,20] in the context of commercial (plantation) forestry management [1]. Process-based models, such as agent-based models, have the potential to better explore the future adaptation processes of socio-ecological systems [1,3] and are increasingly used to capture interactions between individual decision-making and the environment [21].…”

“…Prospect theory describes how individuals overweigh low-probability/high-impact events and underweigh high-probability/low-impact events. Potential gains and losses are perceived as relative to reference points instead of utility [21]. In forestry, Prospect Theory has been increasingly applied to explore the effect of the perception of risk and time preferences in forest owners' decision-making [36], but has not been applied in agent-based models.…”

“…Accounts for loss aversion, bounded rationality in evaluation, risk perception, adaptation costs, time-preference, and income constraints [21].…”

“…Does not include other psychological factors, such as perceived ability to perform, and subjective norms and attitudes [21]. Suitable decision rules highly context-dependent [27].…”

“…An analytical hierarchy process was applied to operationalise the agents' behaviour in the context of the roundwood and wood fuel markets [48]. Includes individual attitudes and subjective norms [21].…”