Renewable resources and pollution

✍ Scribed by Martin Schäfer

• Publisher: Elsevier Science
• Year: 1990
• Tongue: English
• Weight: 465 KB
• Volume: 14
• Category: Article
• ISSN: 0895-7177
• DOI: 10.1016/0895-7177(90)90362-q

✦ Synopsis

The problem of determining optimal harvest rates of renewable resources are mostly related to stock dynamics which depend on the stock size itself, the harvest rate, and some exogenous impacts. In this paper the latter ones are given by pollution due to the production of some good which is "essential" for the economy considered. Two decision makers are assumed to control either the harvest rate of the resource or the production rate of the considered good, respectively. Both are maximizing utilities spent by the renewable resource and the produced good. We assume that both decision makers are interested in using both, the resource and the produced good. This constellxon is modelled by a two-person nonzero-sum differential game. The solution concept discussed is the noncooperative Nash equilibrium. The results are compared with special view to cost structures and total extinction of the resource.