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Optimal Resource Management under Conditions of Uncertainty: The Case of an Ocean Fishery

Lewis, Tracy R. (1975) Optimal Resource Management under Conditions of Uncertainty: The Case of an Ocean Fishery. Social Science Working Paper, 104. California Institute of Technology , Pasadena, CA. (Unpublished)

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The optimal management of a natural resource under stochastic conditions is analyzed in general terms and with specific application to the Eastern Pacific Yellowfin tuna fishery. Uncertainties about (1) the current future size of the resource, and (2) the market value of a resource and the cost of extracting it, exist due to variations in economic and environmental conditions. A Markov Decision Process model of the resource is developed to find optimal policies that maximize the discounted stream of expected social returns from resource use. In addition, the model is used to answer these questions: How do optimal programs for allocating resources in a deterministic environment compare with optimal programs under stochastic conditions? Do different attitudes toward social risk bearing, as regards variations in resource rents, have an effect on optimal decision rules? What is the effect of increased uncertainty about resource prices, extraction costs, and resource growth and depletion rates on optimal programs?

Item Type:Report or Paper (Working Paper)
Additional Information:Paper presented at the Winter Econometric Society Meetings, Dallas 1975.
Group:Social Science Working Papers
Series Name:Social Science Working Paper
Issue or Number:104
Record Number:CaltechAUTHORS:20171030-134926318
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82780
Deposited By: Jacquelyn Bussone
Deposited On:30 Oct 2017 21:10
Last Modified:03 Oct 2019 18:58

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