RT Journal Article
SR Electronic
T1 Betting on Extinction: Endangered Species and Speculation
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 460
OP 471
DO 10.2307/3147293
VO 79
IS 4
A1 Bulte, Erwin H.
A1 Mason, Charles F.
A1 Horan, Richard D.
YR 2003
UL http://le.uwpress.org/content/79/4/460.abstract
AB For a number of animal species, speculators are betting on future price increases by holding large stockpiles of commodities from the animal. We develop a model to explain this behavior. We derive conditions where it can be optimal for a speculator to induce poachers to harvest so rapidly as to make extinction of the species inevitable. Results from a simulation based on the black rhino indicate that “betting on extinction” may be pro. table for reasonable parameter values. We also find that extinction is favored by low discount rates or high growth rates. (Q22)