Rational decision making in water resources in the presence of risk and uncertainty

Most decisions involve certain amounts of risk and this greatly affects design and operation of water resources projects. The concept of risk combines a probabilistic measure of the occurrence of the event and its consequences. A risky decision exposes the decision maker to the possibility of some loss. A rational decision is aimed at a goal, is technically sound, economical, and is arrived by following a rational evaluation process. When many decisions are possible, the inferior alternatives are eliminated and the best among the remaining is chosen. Rational decision making involves decisions to accept a known or assumed risk and / or the implementation of actions to reduce the probability of occurrence. A brief review of the prevalent theories of risk management is provided. A framework for rational decision making under risk for water resources management is also suggested.