Abstract
Heather moorland is an important ecosystem found in Northern England and Scotland. It is sustained by management practices associated with sheep production and grouse shooting. There exist equilibria between the shooting firm and grazier that depend upon the relative profitability of sheep production and grouse shooting, the distribution of property rights between the grazier and shooting firm, and the scope for the firms to co-operate in heather management and negotiate reduced stocking rates. The forms of equilibria are explored for a representative moor using a dynamic simulation model that includes a dynamic programming algorithm to determine the optimal shoot. Results illustrate the production possibilities between grouse shooting and sheep production and the optimal shooting strategies for different states of the heather. They also clearly demonstrate the current policy of paying a headage subsidy on sheep runs counter to conservation objectives.
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