Renewable resource market obeying difference equations: Stable points,stable cycles,and Chaos (1991)

In this paper, the basic principles of the Chaos Theory are applied to dynamic systems involving renewable resource and harvest. The results of simulations are presented regarding harvested resource stock time path. It is shown that stationary steady-state is only one of many different possible outcomes of bioeconomic equilibrium. The varying impacts that different management policies have on an unstable dynamic system are also studied. It is shown that in unstable resource systems, the effects of some policy measures will be very different from the ones obtained through traditional resource analysis. It also shows that policies which induce a stabilizing effect in stock time series will generally provide greater welfare gains. The results are illustrated by two market examples.