This paper derives the optimal harvesting policy for a renewable natural resource using a real-option model. The harvesting policy is illustrated using the well-known “tree-cutting” or “optimal rotation” problem from Forest Economics. We show how to identify the optimal tree size at...

This study presents a multispecies stochastic model. The model suggests optimal fishing policy for two species in a three species predator prey ecosystem in the Barents Sea. We have employed stochastic dynamic programing to solve a three dimensional model, where catch is optimized by a...