OPTIMAL INVESTMENT IN THE PROTECTION OF A VULNERABLE BIOLOGICAL RESOURCE

Natural Resource Modelling - Tập 3 Số 4 - Trang 463-480 - 1989
William J. Reed1
1Department of Mathematics and Statistics University of Victoria Victoria B.C. Canada V8W 2Y2

Tóm tắt

It is assumed that the probability of destruction of a biological asset by natural hazards can be reduced through investment in protection. Specifically a model, in which the hazard rate depends on both the age of the asset and the accumulated invested protection capital, is assumed. The protection capital depreciates through time and its effectiveness in reducing the hazard rate is subject to diminishing returns. It is shown how the investment schedule to maximize the expected net present value of the asset can be determined using the methods of deterministic optimal control, with the survival probability regarded as a state variable. The optimal investment pattern involves “bang‐bang‐singular” control. A numerical scheme for determining jointly the optimal investment policy and the optimal harvest (or replacement) age is outlined and a numerical example involving forest fire protection is given.

Từ khóa


Tài liệu tham khảo

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Thông tin xuất bản

Natural Resource Modelling

Tập 3 Số 4

463-480

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