Optimal harvesting under resource stock and price uncertainty

Arbeitspapier

We analyze optimal harvesting policy under stochastic price and stock dynamics. We state a set of weak conditions under which the optimal policy can be characterized by a single exercise threshold and show that the value of optimal harvesting and depletion policies can be expressed as the separable form according to which only the current price and the expected per capita growth rate affect the threshold, while under risk neutrality volatility of price dynamics will have no effect. Uncertainty makes waiting valuable and the optimal threshold is higher when harvesting can be exercised only once than in the sequential case.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1384

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; Capital Budgeting; Fixed Investment and Inventory Studies; Capacity ; Information, Knowledge, and Uncertainty: General
• Subject: optimal harvesting ; stochastic price and stock dynamics ; single and sequential ; Ernte ; Erneuerbare Ressourcen ; Kontrolltheorie ; Ressourcenökonomik ; Stochastischer Prozess ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Alvarez, Luis H. R. ; Koskela, Erkki
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/18748
• Last update: 10.03.2025, 11:42 AM CET