| Abstract: | A model of renewable resource exploitation under event uncertainty is formulated. The model is applied to analyze the situation in which excessive water diversion for human needs can lead to the extinction of an animal population. Special attention is given to uncertainty regarding the conditions that lead to extinction. The manner in which the potential benefit foregone due to the species' extinction (the “extinction penalty”) induces more conservative exploitation policies is studied in detail. When the extinction penalty is ignored, the optimal policy is to drive the resource stock to a particular equilibrium level from any initial state. When the extinction penalty is accounted for and the conditions that lead to extinction are not fully understood (i.e., involve uncertainty), an interval of equilibrium states is identified, which depends on the penalty and on the immediate extinction risk. |
