We analyze optimal harvesting policy under stochastic price and stock dynamics. We state a set of weak conditions under which the optimal policy can be characterized by a single exercise threshold and show that the value of optimal harvesting and depletion policies can be expressed as the...

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...

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...