Optimal aquacultural management under conditions of price uncertainty and open-access fishery interaction

Existing literature dealing with optimal aquaculture management assumes fixed market prices and nonexistence of open-access fishery supply. These assumptions result in identical optimal solutions of the control variables for all cycles of production.;The present work develops a more general model, using optimal control (the maximum principle) as an analytical tool to determine the optimal stock, harvest (thinning), and period of production. The model incorporates the conditions of certain and uncertain market-price fluctuations in addition to the existence of open-access fishery supply.;The impact of certain price fluctuations is to change the optimal stock level based on the modified Golden Rule. The directions of price shifts determines the optimal stock level. Optimal harvesting (thinning) policies depend on the market-price assumption. The myopic policy is used when market price is fixed, and the blocked intervals policy is used when market price fluctuates.;The existence of open-access fishery supply and its impact on optimal aquaculture management are discussed using price/stock dynamics and market frameworks. The perfect and imperfect (cartel) market equilibria of the aquaculture industry are compared, and the results are evaluated.;Under price uncertainty, the optimal stock level is greater, the harvesting (thinning) level is lower, and the period of production cycle is longer than in a certain market. These results assume that the aquaculture manager has a nonincreasing risk-averse utility function.;The existence in the market of aquaculture decreases economic rent dissipation in the open-access fishery and delays the extinction of the natural stock of fish. The compensating and equivalent variations in the risk of market price uncertainty are estimated.