Optimality of impulse harvesting policies
We explore the link between cyclical and smooth resource exploitation. We define an impulse control framework which can generate both cyclical solutions and steady-state solutions. Our model can admit convex and concave profit functions and allows the integration of different stock-dependent profit functions. We show that the strict concavity of the profit function is only a special case of a more general condition, related to submodularity, that ensures the existence of optimal cyclical policies. We then establish a link with the discrete-time models with cyclical solutions by Benhabib and Nishimura (J Econ Theory 35:284–306, 1985 ) and Dawid and Kopel (J Econ Theory 76:272–297, 1997 ). For the steady-state solution, we explore the relation to Clark’s ( 1976 ) continuous control model. Copyright Springer-Verlag 2013
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Volume (Year): 52 (2013)
Issue (Month): 2 (March)
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