Averting biodiversity collapse in tropical forest protected areas

The rapid disruption of tropical forests probably imperils global biodiversity more than any other contemporary phenomenon(1-3). With deforestation advancing quickly, protected areas are increasingly becoming final refuges for threatened species and natural ecosystem processes. However, many protected areas in the tropics are themselves vulnerable to human encroachment and other environmental stresses(4-9). As pressures mount, it is vital to know whether existing reserves can sustain their biodiversity. A critical constraint in addressing this question has been that data describing a broad array of biodiversity groups have been unavailable for a sufficiently large and representative sample of reserves. Here we present a uniquely comprehensive data set on changes over the past 20 to 30 years in 31 functional groups of species and 21 potential drivers of environmental change, for 60 protected areas stratified across the world's major tropical regions. Our analysis reveals great variation in reserve `health': about half of all reserves have been effective or performed passably, but the rest are experiencing an erosion of biodiversity that is often alarmingly widespread taxonomically and functionally. Habitat disruption, hunting and forest-product exploitation were the strongest predictors of declining reserve health. Crucially, environmental changes immediately outside reserves seemed nearly as important as those inside in determining their ecological fate, with changes inside reserves strongly mirroring those occurring around them. These findings suggest that tropical protected areas are often intimately linked ecologically to their surrounding habitats, and that a failure to stem broad-scale loss and degradation of such habitats could sharply increase the likelihood of serious biodiversity declines.

A simulation-based algorithm for optimal pricing policy under demand uncertainty

We propose a simulation-based algorithm for computing the optimal pricing policy for a product under uncertain demand dynamics. We consider a parameterized stochastic differential equation (SDE) model for the uncertain demand dynamics of the product over the planning horizon. In particular, we consider a dynamic model that is an extension of the Bass model. The performance of our algorithm is compared to that of a myopic pricing policy and is shown to give better results. Two significant advantages with our algorithm are as follows: (a) it does not require information on the system model parameters if the SDE system state is known via either a simulation device or real data, and (b) as it works efficiently even for high-dimensional parameters, it uses the efficient smoothed functional gradient estimator.