A Market-Based Approach to Manage Endangered Species Interactions

19 Pages Posted: 13 Sep 2010

See all articles by Sturla Kvamsdal

Sturla Kvamsdal

Norwegian School of Economics (NHH)

Stephen M. Stohs

University of California, San Diego (UCSD) - Southwest Fisheries Science Center

Date Written: September 10, 2010

Abstract

An economic activity interacts with an endangered species. The activity can be divided into mutually exclusive strata with different levels of interaction. Observing the activity in order to monitor interactions is costly. It may be desirable to manage the activity with a probability model which balances the benefit from the activity against the cost of the interaction with the endangered specie instead. The model gives rise to a permit scheme which fixates the risk of interaction over all strata and which uses the market mechanism to optimally allocate the activity between strata. The model can facilitate uncertainty in interaction rate estimates.

Suggested Citation

Kvamsdal, Sturla and Stohs, Stephen M., A Market-Based Approach to Manage Endangered Species Interactions (September 10, 2010). NHH Dept. of Finance & Management Science Discussion Paper No. 2010/11, Available at SSRN: https://ssrn.com/abstract=1676117 or http://dx.doi.org/10.2139/ssrn.1676117

Sturla Kvamsdal (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Stephen M. Stohs

University of California, San Diego (UCSD) - Southwest Fisheries Science Center ( email )

P.O. Box 271
La Jolla, CA 92038-0271
United States

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