When adopted, wildlife protection policies in Canadian forests typically cover large areas and affect multiple economic agents working in these landscapes. Such measures are likely to increase the costs of timber for forestry companies operating in the area, which may hinder their acceptance of the policies unless harvesting remains profitable. We propose a bi-level wildlife protection problem that accounts for the profit-maximizing behavior of forestry companies operating in an area subject to protection. We consider the regulator with a wildlife protection mandate and forestry companies licensed to harvest public forest lands. We depict the relationship between the regulator and forestry companies as a leader-follower Stackelberg game. The leader sets the protected area target for each license area and the followers adjust their strategies to maximize payoffs while meeting the protection target set by the leader. The leader’s objective is to maximize the area-wide protection of spatially contiguous habitat while accounting for the followers’ profit-maximizing behavior. We apply the approach to investigate habitat protection policies for woodland caribou in the Churchill range, Ontario, Canada. We compare the game-theoretic solutions with solutions that do not consider the forest companies’ objectives and also with solutions equalizing the revenue losses among the companies.
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