Article ID Journal Published Year Pages File Type
10437765 Journal of Economic Behavior & Organization 2005 26 Pages PDF
Abstract
We study an ecological management problem where the interaction of the maximizing-welfare dynamic decision and the dynamics of the ecosystem admits multiple equilibria. We follow the example of a shallow lake by Brock, etc. Low loading preserves resilience of the ecosystem while high loading may lead to the deterioration of the ecosystem. We consider instruments of a regulatory agency that may help to maintain and enhance resilience by enlarging the domain of attraction of the low-pollution equilibrium. The global dynamics of all our model variants, without and with tax rates, are analytically studied by the Hamilton-Jacobi-Bellman method and numerically solved through dynamic programming.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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