# Maximizing the Present Value of Resource Rent in a Gordon-Schaefer Model

Maximizing the Present Value of Resource Rent in a Gordon-Schaefer Model

The classical Gordon–Schaefer model presents equilibrium revenue () and cost (, including opportunity costs of labor and capital, in a fishery where the fish population growth follows a logistic function. Unit price of harvest and unit cost of fishing effort are assumed to be constants. In this case, the open access solution without restrictions () is found when and no rent (abnormal profit, ) is obtained. Abnormal profit (here resource rent) is maximized when (maximum economic yield, ). Discounted future flow of equilibrium rent is maximized when , where is the unit rent of harvest and is the discount rate. This situation is referred to as the optimal solution (), maximizing the present value of all future resource rent. The open access solution and equilibriums are found to be special cases of the optimal solution, when and , respectively.

TR

TC)

OA

TR=TC

Π=TR-TC

TR'(X)=TC'(X)

MEY

Π'(X)/δ=π

π

δ

OPT

MEY

δ=∞

δ=0