Uncertainty and markets for renewable resources

Leonard J. Mirman*, Daniel F. Spulber

*Corresponding author for this work

Research output: Contribution to journalArticle

9 Scopus citations

Abstract

The market allocation of renewable resources is examined when growth rates are affected by random disturbances. Given free access to a renewable resource, environmental disturbances are shown to affect the biological survival of the resource. The optimal solution is then examined and it is shown to be achieved by a competitive allocation when property rights are clearly defined given rational expectations or a complete set of contingent futures markets. The stochastic dynamics are shown in each case to differ considerably from the deterministic model.

Original languageEnglish (US)
Pages (from-to)239-264
Number of pages26
JournalJournal of Economic Dynamics and Control
Volume8
Issue number3
DOIs
StatePublished - Jan 1 1984

ASJC Scopus subject areas

  • Economics and Econometrics
  • Control and Optimization
  • Applied Mathematics

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