Optimality of impulse harvesting policies

Erdlenbruch, Katrin; Jean-Marie, Alain; Moreaux, Michel; Tidball, Mabel
March 2013
Economic Theory;Mar2013, Vol. 52 Issue 2, p429
Academic Journal
We explore the link between cyclical and smooth resource exploitation. We define an impulse control framework which can generate both cyclical solutions and steady-state solutions. Our model can admit convex and concave profit functions and allows the integration of different stock-dependent profit functions. We show that the strict concavity of the profit function is only a special case of a more general condition, related to submodularity, that ensures the existence of optimal cyclical policies. We then establish a link with the discrete-time models with cyclical solutions by Benhabib and Nishimura (J Econ Theory 35:284-306, ) and Dawid and Kopel (J Econ Theory 76:272-297, ). For the steady-state solution, we explore the relation to Clark's () continuous control model.


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