Evolution of Harvesting Strategies: Replicator and Resource Dynamics

Economic theories of managing renewable resources, such as fisheries and forestry, traditionally assume that individual harvesters are perfectly rational and thus able to compute the optimal harvesting strategy that maximizes their profits. The current paper presents an alternative approach based on bounded rationality and evolutionary mechanisms. This is applied to the problem of interactions between harvesters of a renewable resource. The model assumes that individual harvesters face a choice between two harvesting strategies. The evolution of the distribution of strategies in the population is modeled through a replicator dynamics equation. The latter captures the idea that strategies yielding above average profits are more demanded than strategies yielding below average profits, so that the first type ends up accounting for a larger part in the population. Mathematically, the combination of resource and evolutionary processes leads to complex dynamics. The paper identifies the steady-states of the system and presents the existence and stability conditions for each equilibrium. In addition, effects of changes in prices are analyzed. A main result of the paper is that under certain conditions both strategies can survive in the long-run. Finally, policy implications for the management of renewable resources are discussed.