This paper demonstrates a predator-prey system of cod and capelin that confronts a possible scenario of prey extinction under the first-best policy in a stochastic world. We discover a novel ‘super-harvest' phenomenon that the optimal harvest of the predator is even higher than the myopic...

In commercial fisheries, stock collapse is an intrinsic problem caused by overexploitation or due to pure stochasticity. To analyze the risk of stock collapse, we apply a relatively simple Monte Carlo approach which can capture complex stock dynamics. We use an economic model with downward...

Renewable resources are affected by both environmental variability, which makes the year-to-year stock growth uncertain, and the risk of irreversible events (e.g., a stock collapse). Little is known about how a renewable resource harvester would optimally respond to the combined effects of both...

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...

A risk-neutral agent optimizes extraction of dividends or renewable natural resources modelled by a jump-diffusion stock process, where the optimal strategy is characterized as the minimal intervention required to keep the stock process inside a given region. The introduction of a small fixed...

The sizeable literature on extinction in economics has paid scant attention to the problem of constructing measures of species extinction. Moreover, this literature has not studied the question of species extinction in stochastic systems that are jointly determined. Consequently, the objective...

The economics literature on extinction has not paid much attention to the task of constructing metrics of species extinction. Further, this literature has not analyzed the issue of species extinction in stochastic ecological-economic systems that are jointly determined. As such, the goal of this...

Actions taken by a manager affect the health of the keystone species of an ecological-economic system. In turn, the health of these keystone species largely determines the resilience of the underlying ecological-economic system. What are the nexuses between managerial actions, keystone species,...

Actions taken by a manager affect the health of the keystone species of an ecological-economic system. In turn, the health of these keystone species largely determines the resilience of the underlying ecological-economic system. What are the nexuses between managerial actions, keystone species,...

This paper provides a theoretical analysis of time restrictions in the context of natural resource management in North America. The economic inefficiencies arising from the use of time restrictions to protect natural resources have been well documented by researchers. We first show that in the...