Optimal exploitation of a biomass confronted with the threat of collapse

This paper examines how to harvest a biomass exposed to a potential collapse at an uncertain date. A specific recovery effect is identified which may be positive or negative. In general, the effect on the optimal biomass is indeterminate and depends upon the failure rate, the expected collapse, and the function relating the extent of the collapse to the size of the pre-collapse stock. Apart from balanced harvest strategies, even extreme strategies of total extinction or extreme precaution may be optimal in some cases. The model is applied to the North Sea herring fishery. (JEL Q20, Q22).