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A market-based approach to manage endangered species interactions

Kvamsdal, Sturla Furunes; Stohs, Stephen M.
Working paper
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URI
http://hdl.handle.net/11250/164147
Date
2010-09
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  • Discussion papers (FOR) [509]
Abstract
An economic activity interacts with an endangered species. The activity

can be divided into mutually exclusive strata with different levels of inter-

action. Observing the activity in order to monitor interactions is costly.

It may be desirable to manage the activity with a probability model which

balances the benefit from the activity against the cost of the interaction

with the endangered specie instead. The model gives rise to a permit

scheme which fixates the risk of interaction over all strata and which uses

the market mechanism to optimally allocate the activity between strata.

The model can facilitate uncertainty in interaction rate estimates.
Publisher
Norwegian School of Economics and Business Administration. Department of Finance and Management Science
Series
Discussion paper
2010:11

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