Harvest Decisions and Asset Valuation for Biological Resources Exhibiting Size-Dependent Stochastic Growth.

Optimal harvest rules and preharvest valuation procedures are derived for biological assets with stochastic size-dependent growth in a stochastic price environment. These issues are analyzed as continuous-time optimal stopping problems. Both the "single-rotation" and "ongoing-rotations" problems are addressed. The sensitivity of harvest and valuation rules is assessed. The results are compared with those derived from a "myopic look-ahead" procedure and with the corresponding findings for age-dependent growth. Copyright 1990 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.