  Ecological systems are dynamic and policies to manage them need to respond to
that variation. However, policy adjustments will sometimes be costly, which
means that fine-tuning a policy to track variability in the environment very
tightly will only sometimes be worthwhile. We use a classic fisheries
management question -- how to manage a stochastically varying population using
annually varying quotas in order to maximize profit -- to examine how costs of
policy adjustment change optimal management recommendations. Costs of policy
adjustment (here changes in fishing quotas through time) could take different
forms. For example, these costs may respond to the size of the change being
implemented, or there could be a fixed cost any time a quota change is made. We
show how different forms of policy costs have contrasting implications for
optimal policies. Though it is frequently assumed that costs to adjusting
policies will dampen variation in the policy, we show that certain cost
structures can actually increase variation through time. We further show that
failing to account for adjustment costs has a consistently worse economic
impact than would assuming these costs are present when they are not.

Populations and Evolution