Optimal Control of Desensitizing Inputs: The Case of Paylean

We examine production economic implications of a specialized input to which a biological system (e.g., an animal) becomes desensitized over time, but its marginal productivity can be restored by increasing the dosage level. Optimal dosage levels and their timing become choice variables and may substitute or complement other inputs. This analysis is demonstrated for the case of Paylean in swine production. Use of a step-up approach to optimal Paylean use is shown to return substantial value, especially in market structures that reward producers for lean carcass value, and in cases where the health status of the animals is compromised. Copyright 2010, Oxford University Press.