Optimal harvesting of a spatial renewable resource

Stefan Behringer and Thorsten Upmann

Journal of Economic Dynamics and Control, 2014, vol. 42, issue C, 105-120

Abstract: In this paper we investigate the optimal harvesting of a renewable natural resource. While in most standard approaches the resource is located at a single point, we allow the resource to be distributed spatially. Consequently, an agent who exploits the resource has to travel from one location to another. For a fixed planning horizon, we investigate the speed and the path of harvesting chosen by the agent. We show that the agent adjusts this speed so as to visit each location only once, even in the absence of travelling cost. Since the agent does not return to any location for a second harvest, it is optimal to fully deplete the resource upon arrival. A similar type of bang–bang solution results when we drop the assumption of a constant harvesting rate: allowing for a variable harvesting rate, the agent chooses to fully exploit the resource either in the last or in the first travelling period. A society interested in conserving some of the resource thus has to take measures to limit the exploitative behaviour of the agent.

Keywords: Optimal harvesting; Spatial renewable resource; Continuous time; Market failure; Bang–bang solution (search for similar items in EconPapers)
JEL-codes: C61 D21 Q20 Q28 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Optimal Harvesting of a Spatial Renewable Resource (2013)
Working Paper: Optimal Harvesting of a Spatial Renewable Resource (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:42:y:2014:i:c:p:105-120

DOI: 10.1016/j.jedc.2014.03.008

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