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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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:
Contact details of provider:
Postal: NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 95 92 93
Fax: +47 55 95 96 50
Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
More information through EDIRC
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.:
- Reed, William J., 1979. "Optimal escapement levels in stochastic and deterministic harvesting models," Journal of Environmental Economics and Management, Elsevier, vol. 6(4), pages 350-363, December.
- repec:ags:mareec:47834 is not listed on IDEAS
- James Sanchirico & Michael Springborn, 2011. "How to Get There From Here: Ecological and Economic Dynamics of Ecosystem Service Provision," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(2), pages 243-267, February.
- Sarkar, Sudipto, 2009. "Optimal fishery harvesting rules under uncertainty," Resource and Energy Economics, Elsevier, vol. 31(4), pages 272-286, November.
- Clark, Colin W. & Munro, Gordon R., 1975. "The economics of fishing and modern capital theory: A simplified approach," Journal of Environmental Economics and Management, Elsevier, vol. 2(2), pages 92-106, December.
- Nostbakken, Linda, 2006. "Regime switching in a fishery with stochastic stock and price," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 231-241, March.
- Robert J. Johnston & Jon G. Sutinen, 1996. "Uncertain Biomass Shift and Collapse: Implications for Harvest Policy in the Fishery," Land Economics, University of Wisconsin Press, vol. 72(4), pages 500-518.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stein Fossen).
If references are entirely missing, you can add them using this form.