Economic Planning and Uncertainty in Renewable Resources
Contribution to Book
Dynamic Games in Economic Analysis
This work is intended to be a first step in analyzing optimal harvesting policies under the assumption of uncertainty about the time of extinction. In general, we find the expected result that a higher hazard rate results in more vigorous harvesting. When we allow the hazard rate to depend only on time, it is shown that changing beliefs about the survival rates of the resource may account for the nonmonotonic behavior which is often observed.