Resource Management with Stochastic Recharge and Environmental Threats
AbstractExploitation diminishes the capacity of renewable resources to with-stand environmental stress, increasing their vulnerability to extreme conditions that may trigger abrupt changes. The onset of such events depends on the coincidence of extreme environmental conditions (environmental threat) and the resource state (determining its resilience). When the former is uncertain and the latter evolves stochastically, the uncertainty regarding the event occurrence is the result of the combined effect of these two uncertain components. We analyzed optimal resource management in such a setting. Existence of an optimal stationary policy is established and long run properties are characterized. A numerical illustration based on actual data is presented.
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Bibliographic InfoPaper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 52784.
Date of creation: Aug 2009
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Postal: Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100
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Stochastic stock dynamics; event uncertainty; Markov decision process; optimal stationary policy; Environmental Economics and Policy;
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