Fisheries Management Under Irreversible Investment: Does Stochasticity Matter?

Poudel, Diwakar; Sandal, Leif Kristoffer; Kvamsdal, Sturla F.; Steinshamn, Stein Ivar

doi:10.2139/ssrn.1957601

Cited by 3 publications

(6 citation statements)

References 26 publications

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“…While there is no equilibrium in the stochastic setting, all simulated paths reached a stable, or stationary, region. We call this region the long-term sustainable optimal (LSO) region (Poudel et al 2013); Smith (1986) calls it the optimal stochastic steady state.…”

Section: Dynamic Behaviormentioning

confidence: 99%

“…Roughgarden and Smith (1996) discuss multiple sources of uncertainty and their potential role in the collapse of fisheries; the focus on collapse has become a staple of later work. More recent articles of particular relevance are Sethi et al (2005), Nøstbakken (2006), Sarkar (2009), andPoudel et al (2013). Sethi et al (2005) study optimal escapement levels in a model that includes uncertainty in growth, stock measurement and policy implementation.…”

Section: Introductionmentioning

confidence: 99%

“…While the analysis features a two-dimensional problem, there is only a single stochastic driver in the model. Poudel et al (2013) study a fisheries fleet investment problem with two stochastic drivers, one related to the biology and one related to the economy. Notably, both Mason (2012) and Poudel et al (2013) are formulations in continuous time.…”

Section: Introductionmentioning

confidence: 99%

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Harvesting in a Fishery with Stochastic Growth and a Mean-Reverting Price

Kvamsdal

Poudel

Sandal

2014

Environ Resource Econ

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We analyze a continuous, nonlinear bioeconomic model to demonstrate how stochasticity in the growth of fish stocks affects the optimal exploitation policy when prices are stochastic, mean-reverting and possibly harvest dependent. Optimal exploitation has nonlinear responses to the price signal and should be conservative at low levels of biological stochasticity and aggressive at high levels. Price stochasticity induces conservative exploitation with little or no biological uncertainty, but has no strong effect when the biological uncertainty is larger. We further observe that resource exploitation should be conservative when the price reverts slowly to the mean. Simulations show that, in the long run, both the stock level and the exploitation rate are lower than in the deterministic solution. With a harvest-dependent price, the long-run price is higher in the stochastic system. The price mean reversion rate has no influence on the long-run solutions.

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Section: Dynamic Behaviormentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Harvesting in a Fishery with Stochastic Growth and a Mean-Reverting Price

Kvamsdal

Poudel

Sandal

2014

Environ Resource Econ

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“…Although operating the fishery with some underutilized capacity may be desirable when the harvesting and investment behaviors are both optimally controlled (Poudel et al 2013), the process whereby capital accumulates and excess capacity emerges in the presence of race to fish and invest behaviors is not well understood in the literature. In addition to the generation of pure economic waste in the form of underutilized fishing capacity, excess capacity results in reduced ability of fisheries managers to effectively regulate effort and catch.…”

Section: Introductionmentioning

confidence: 99%

“…There are a number of studies exploring issues of optimal fisheries management when capital adjustment is either not possible or costly (Clark, Clarke, and Munro 1979;Charles and Munro 1985;Boyce 1995;Singh, Weninger, and Doyle 2006;Poudel et al 2013). To the best of our knowledge, there are only a small number of existing models of the fishery in which incentives to race to fish and invest are represented and capital adjustment is assumed to be costly (McKelvey 1985;Munro and Clark 2003;Eisenack, Welsch, and Kropp 2006).…”

Section: Introductionmentioning

confidence: 99%

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

Jennings¹,

Yamazaki²

2016

Marine Resource Economics

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A B S T R A C TUnderstanding the process whereby fishing capital accumulates and excess capacity emerges, particularly in fisheries where incentives for race to fish and race to invest are present, and where capital is not perfectly malleable, remains an important topic. We develop a dynamic model, incorporating quasi-malleable capital, race to fish and invest behaviors and myopic expectations, in which the level of excess capacity is endogenously determined. We show the importance of capital malleability, and of other biological and economic conditions, in determining the existence and strength of persistent equilibrium excess capacity in the fishery. We also highlight a link between the state of the fishery at the time race behavior emerges and the resultant level of excess capacity. Our results have implications for both the management of excess capacity and the use of empirical measures of excess capacity as performance indicators in fisheries where race behaviors are present.

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Stochastic Optimization for Multispecies Fisheries in the Barents Sea

Poudel

Sandal

2014

SSRN Journal

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This study presents a multispecies stochastic model. The model suggests optimal fishing policy for two species in a three species predator prey ecosystem in the Barents Sea. We have employed stochastic dynamic programing to solve a three dimensional model, where catch is optimized by a multispecies feedback strategy. Application of the model in cod, capelin and herring ecosystem in the Barents Sea shows that the optimal catch for stochastic interaction model is more conservative compared to deterministic policy. Furthermore, we found that stochasticity has strong effect on optimal exploitation policy in the prey (capelin) compared to the predator (cod) species.

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Fisheries Management Under Irreversible Investment: Does Stochasticity Matter?

Abstract: We

Cited by 3 publications

References 26 publications

Harvesting in a Fishery with Stochastic Growth and a Mean-Reverting Price

Harvesting in a Fishery with Stochastic Growth and a Mean-Reverting Price

Excess Capacity and Capital Malleability in a Fishery with Myopic Expectations

Stochastic Optimization for Multispecies Fisheries in the Barents Sea

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