The costate variable in natural resource optimal control problems

DOI10.1111/J.1939-7445.1999.TB00020.XMaRDI QIDQ2745386zbMATH OpenOpenAlexFDO

Authors Kenneth S. Lyon

Publication date 10 October 2001

Published in Natural Resource Modeling (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1111/j.1939-7445.1999.tb00020.x

Mathematics Subject Classification ID

Applications of optimal control and differential games (49N90) Environmental economics (natural resource models, harvesting, pollution, etc.) (91B76) Ecology (92D40)

Review text

We discuss the role of the costate variable (shadow value) for the resource stock in both nonrenewable and renewable resource problems. We separate the information in this variable into a scarcity and a cost effect. The scarcity effect is the portion of the shadow value that is due just to the scarcity of the resource relative to its demand, while the cost effect is a measure of the impact of the marginal unit upon future extraction costs. It is shown that in the nonrenewable resource, mining, problem both can exist simultaneously, but in the renewable resource, fisheries, model the two effects are mutually exclusive. In our analysis of the fisheries model we develop an expression for the time path of the marginal unit of fish stock. We do this using the theorem of Continuous Dependence on Initial Conditions. This result is then used to generate the conclusion that \(g(x)\) is the biological own rate of interest, where \(g(x)\) is the growth function for the resource stock, \(x\).

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• Costate variables correctly value stocks at each instant
• Optimization of inputs in a spatially variable natural resource: Unconditional vs. conditional analysis
• The optimal strategy for a bioeconomical model of a harvesting renewable resource problem.
• Stochastic control of ecological networks
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• OPTIMAL DISCOUNTING IN CONTROL PROBLEMS THAT SPAN MULTIPLE GENERATIONS
• OPTIMAL DISCOUNTING OF BENEFITS FROM CLEANUP AT WASTE SITES
• THE COSTATE VARIABLE IN A STOCHASTIC RENEWABLE RESOURCE MODEL
• NONRENEWABLE RESOURCE EXTRACTIONS WITH A POLLUTION SIDE EFFECT: A COMPARATIVE DYNAMIC ANALYSIS
• SPACETIME DISCOUNTED VALUE OF NETWORK CONNECTIVITY

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