Harvesting a Remote Renewable Resource

39 Pages Posted: 9 Jan 2018

See all articles by Thorsten Upmann

Thorsten Upmann

Helmholtz Institute for Functional Marine Biodiversity at the University of Oldenburg; Bielefeld University - Department of Business Administration and Economics; CESifo (Center for Economic Studies and Ifo Institute)

Stefan Behringer

University of Duisburg-Essen - Mercator School of Management

Date Written: November 16, 2017

Abstract

In standard models of spatial harvesting, the resource is distributed over the complete domain and the agent is able to control the harvesting activity everywhere all the time. In some cases though, it is more realistic to assume that the resource is located at a single point in space and that the agent is required to travel there in order to be able to harvest. In this case, the agent faces a combined travelling–and–harvesting problem. We scrutinize this type of a two–stage optimal control problem, and illuminate the interdependencies between the solution of travelling and that of the harvesting sub-problem. Since the model is parsimoniously parameterised, we are able to analytically characterise the optimal policy of the complete travelling–and–harvesting problem. In an appendix we show how bounds on either control, i. e. on acceleration and on the harvesting capacity, as well as a positive discount rate affect the solution of the travelling–and–harvesting problem.

Keywords: optimal travelling-and-harvesting decision, spatial renewable resource, continuous time, optimal control, two-stage control problem

JEL Classification: Q200, Q220, C610

Suggested Citation

Upmann, Thorsten and Behringer, Stefan, Harvesting a Remote Renewable Resource (November 16, 2017). CESifo Working Paper Series No. 6724, Available at SSRN: https://ssrn.com/abstract=3098306 or http://dx.doi.org/10.2139/ssrn.3098306

Thorsten Upmann (Contact Author)

Helmholtz Institute for Functional Marine Biodiversity at the University of Oldenburg ( email )

Ammerländer Heerstraße 231
Oldenburg, 26129
Germany

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
D-33501 Bielefeld, NRW 33501
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Stefan Behringer

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany

HOME PAGE: http://www.stefanbehringer.com

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