Harvest decisions and asset valuation for biological resources exhibiting size-dependent stochastic growth
Date
2009-08-15T00:00:33Z
Authors
Reed, William J.
Clarke, Harry R.
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Abstract
Optimal harvest rules and pre-harvest valuation procedures for biological assets with stochastic size-dependent growth in a stochastic price environment. These issues are analyzed as continuous-time optimal stopping problems. Both the "single-rotation" and "ongoing rotations" problem are addressed. The sensitivity of harvest and valuation rules is assessed. The results are compared with those derived from a "myopic look-ahead" procedure and with the corresponding findings for age-dependent growth.
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Keywords
tree problem, Wicksell rule, Faustmann rule, optimal stopping, diffusions, myopic-look-ahead rule