Addressing structural and observational uncertainty in resource management

• We develop a framework to address both structural and observational uncertainty.
• The framework allows for stochastic dependence among observed and state variables.
• Beliefs about unknown variables are updated using any relevant observed variable.
• Examples of decisions faced in natural resources management are presented.

Most natural resource management and conservation problems are plagued with high levels of uncertainties, which make good decision making difficult. Although some kinds of uncertainties are easily incorporated into decision making, two types of uncertainty present more formidable difficulties. The first, structural uncertainty, represents our imperfect knowledge about how a managed system behaves. The second, observational uncertainty, arises because the state of the system must be inferred from imperfect monitoring systems. The former type of uncertainty has been addressed in ecology using Adaptive Management (AM) and the latter using the Partially Observable Markov Decision Processes (POMDP) framework. Here we present a unifying framework that extends standard POMDPs and encompasses both standard POMDPs and AM. The approach allows any system variable to be observed or not observed and uses any relevant observed variable to update beliefs about unknown variables and parameters. This extends standard AM, which only uses realizations of the state variable to update beliefs and extends standard POMDP by allowing more general stochastic dependence among the observable variables and the state variables. This framework enables both structural and observational uncertainty to be simultaneously modeled. We illustrate the features of the extended POMDP framework with an example.