Harvesting versus biodiversity:: An Occam's Razor version

The point of departure for this paper is the familiar prototype fisheries model where a fictitious sole owner harvests a fish population to maximize present discounted profits. The paper answers analytically the following question. "What happens to a policy when the sole owner also values biodiversity, as well as profits?'' It turns out that the size of the steady-state stock and the number of species preserved are both higher, when species diversity is positively valued. This paper provides a sharp characterization of the optimal policy in terms of the usual economic parameters and an exogenously introduced willingness-to-pay function for species preservation.