Analyzing Risk of Stock Collapse in a Fishery under Stochastic Profit Maximization
AbstractIn 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 sloping demand and stock dependent costs. First, we derive an optimal exploitation policy as a feedback control rule and analyze the effects of stochasticity. We observe that the stochastic solution is more conservative compared to the deterministic solution at low level of stochasticity. For moderate level of stochasticity, a more myopic exploitation is optimal at small stock and conservative at large stock level. For relatively high stochasticity, one should be myopic in exploitation. Then, we simulate the system forward in time with the optimal solution. In simulated paths, some stock recovered while others collapsed. From the simulation approach, we estimate the probability of stock collapse and characterize the long term stable region.
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Bibliographic InfoPaper provided by Department of Business and Management Science, Norwegian School of Economics in its series Discussion Papers with number 2012/4.
Length: 23 pages
Date of creation: 27 Apr 2012
Date of revision:
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Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
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Stochasticity; Ensemble Kalman filter; Stock Collapse; Probability;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-05-08 (Agricultural Economics)
- NEP-ALL-2012-05-08 (All new papers)
- NEP-CMP-2012-05-08 (Computational Economics)
- NEP-ORE-2012-05-08 (Operations Research)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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