Regime Switching in a Fishery with Stochastic Stock and Price

  title={Regime Switching in a Fishery with Stochastic Stock and Price},
  author={Linda N\ostbakken},
  • Linda Nøstbakken
  • Published 2005
We develop a bioeconomic model of a fishery subject to stock uncertainty and price uncertainty. With a linear control model, the optimal harvest policy is a bang-bang approach to the optimal stock level, where one harvests either at minimum or full capacity. It is assumed that changing the harvest rate is subject to a switching cost. In this case we show that there are two switching curves in stock-price space, one for entering and one for leaving the fishery. Numerical methods are used to… CONTINUE READING

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