Optimal harvesting with both population and price dynamics.

Abstract

We consider the effects of large inflationary price fluctuations on the computed optimal harvest strategy for a randomized Schaefer model. Both prices and population sizes are assumed random with both background (Wiener) and jump (Poisson) components. Population fluctuations are assumed to be density independent, i.e., relative changes are independent of population size. Stochastic dynamic programming is employed to find the optimal harvesting effort and economic return for a realistic set of bioeconomic data for Pacific halibut. It is found that inflationary effects have a pronounced influence on the optimal return, even in a hazardous or disastrous environment. However, optimal harvesting effort levels are much less sensitive to inflationary effects.