Irreversible investments revisited

Leif K. Sandal; Stein I. Steinshamn; Ayoe Hoff

Irreversible investments revisited

Leif K. Sandal, Stein I. Steinshamn, Ayoe Hoff

7 Citationer (Scopus)

Abstract

A multi-dimensional, non-linear dynamic model in continuous time is presented for the purpose of finding the optimal combination of exploitation and capital investment in optimal renewable resource management. Non-malleability of capital is incorporated in the model through an asymmetric cost-function of investment, and investments can be both positive and negative. Exploitation is controlled through the utilisation rate of available capital. A novel feature in this model is that there are costs associated with the available capital whether it is utilised or not. And, in contrast to most of the previous literature, the state variables, namely the physical capital and the biological resource, enter the objective function. Due to the nonlinearities in this model some of the results are in sharp contrast to previous literature.

Originalsprog	Engelsk
Tidsskrift	Marine Resource Economics
Vol/bind	22
Udgave nummer	3
Sider (fra-til)	255-266
Antal sider	12
ISSN	0738-1360
Status	Udgivet - 2007

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Citationsformater

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title = "Irreversible investments revisited",

abstract = "A multi-dimensional, non-linear dynamic model in continuous time is presented for the purpose of finding the optimal combination of exploitation and capital investment in optimal renewable resource management. Non-malleability of capital is incorporated in the model through an asymmetric cost-function of investment, and investments can be both positive and negative. Exploitation is controlled through the utilisation rate of available capital. A novel feature in this model is that there are costs associated with the available capital whether it is utilised or not. And, in contrast to most of the previous literature, the state variables, namely the physical capital and the biological resource, enter the objective function. Due to the nonlinearities in this model some of the results are in sharp contrast to previous literature.",

keywords = "Former LIFE faculty, Irreversible investments, non-malleable capital, renewable resources",

author = "Sandal, {Leif K.} and Steinshamn, {Stein I.} and Ayoe Hoff",

year = "2007",

language = "English",

volume = "22",

pages = "255--266",

journal = "Marine Resource Economics",

issn = "0738-1360",

publisher = "University of Chicago Press",

number = "3",

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TY - JOUR

T1 - Irreversible investments revisited

AU - Sandal, Leif K.

AU - Steinshamn, Stein I.

AU - Hoff, Ayoe

PY - 2007

Y1 - 2007

N2 - A multi-dimensional, non-linear dynamic model in continuous time is presented for the purpose of finding the optimal combination of exploitation and capital investment in optimal renewable resource management. Non-malleability of capital is incorporated in the model through an asymmetric cost-function of investment, and investments can be both positive and negative. Exploitation is controlled through the utilisation rate of available capital. A novel feature in this model is that there are costs associated with the available capital whether it is utilised or not. And, in contrast to most of the previous literature, the state variables, namely the physical capital and the biological resource, enter the objective function. Due to the nonlinearities in this model some of the results are in sharp contrast to previous literature.

AB - A multi-dimensional, non-linear dynamic model in continuous time is presented for the purpose of finding the optimal combination of exploitation and capital investment in optimal renewable resource management. Non-malleability of capital is incorporated in the model through an asymmetric cost-function of investment, and investments can be both positive and negative. Exploitation is controlled through the utilisation rate of available capital. A novel feature in this model is that there are costs associated with the available capital whether it is utilised or not. And, in contrast to most of the previous literature, the state variables, namely the physical capital and the biological resource, enter the objective function. Due to the nonlinearities in this model some of the results are in sharp contrast to previous literature.

KW - Former LIFE faculty

KW - Irreversible investments, non-malleable capital, renewable resources

M3 - Journal article

SN - 0738-1360

VL - 22

SP - 255

EP - 266

JO - Marine Resource Economics

JF - Marine Resource Economics

IS - 3

ER -

Irreversible investments revisited

Abstract

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FN’s Verdensmål

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Citationsformater