NONLINEAR DYNAMICS AND ECONOMIC INSTABILITY: THE OPTIMAL MANAGEMENT OF A BIOLOGICAL POPULATION

Abstract

Assuming a competitive market, conditions are determined for when a steady-state equilibrium does not exist in the optimal dynamic management of a biological population. Irregular and unpredictable behavior (called “"chaos"”) can arise from fully rational economic decision making. High interest rate, adjustment costs, and an inelastic demand can contribute to market instability.Environmental Economics and Policy,