Strategic exploitation of a common-property resource under uncertainty
AbstractWe construct a game of noncooperative common-resource exploitation which delivers analytical solutions for its symmetric Markov-perfect Nash equilibrium. We examine how introducing uncertainty to the natural law of resource reproduction affects strategic exploitation. We show that the commons problem is always present in our example and we identify cases in which increases in risk amplify or mitigate the commons problem. For a specific class of games which imply Markov-perfect strategies that are linear in the resource stock (our example belongs to this class), we provide general results on how payoff-function features affect the responsiveness of exploitation strategies to changes in riskiness. These broader characterizations of games which imply linear strategies (appearing in an Online Appendix) can be useful in future work, given the technical difficulties that may arise from the possible nonlinearity of Markov-perfect strategies in more general settings.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 65 (2013)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622870
Renewable resource exploitation; Stochastic non-cooperative dynamic games; The commons;
Other versions of this item:
- Christos Koulovatianos & Elena Antoniadou & Leonard J.Mirman, 2007. "Strategic Exploitation of a Common-Property Resource under Uncertainty," Vienna Economics Papers 0703, University of Vienna, Department of Economics.
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- D90 - Microeconomics - - Intertemporal Choice - - - General
- D - Microeconomics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nori Tarui & Charles Mason & Stephen Polasky & Greg Ellis, 2007.
"Cooperation in the Commons with Unobservable Actions,"
200711, University of Hawaii at Manoa, Department of Economics.
- Tarui, Nori & Mason, Charles F. & Polasky, Stephen & Ellis, Greg, 2008. "Cooperation in the commons with unobservable actions," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 37-51, January.
- Hanoch, G & Levy, Haim, 1969. "The Efficiency Analysis of Choices Involving Risk," Review of Economic Studies, Wiley Blackwell, vol. 36(107), pages 335-46, July.
- Brock, William A. & Mirman, Leonard J., 1972. "Optimal economic growth and uncertainty: The discounted case," Journal of Economic Theory, Elsevier, vol. 4(3), pages 479-513, June.
- David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring.
- Stachurski, J., 2001.
"Stochastic Optimal Growth with Unbounded Shock,"
Department of Economics - Working Papers Series
777, The University of Melbourne.
- Stephen Polasky & Nori Tarui & Gregory Ellis & Charles Mason, 2006. "Cooperation in the commons," Economic Theory, Springer, vol. 29(1), pages 71-88, September.
- Koji Shimomura & Danyang Xie, 2008. "Advances on Stackelberg open-loop and feedback strategies," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(1), pages 115-133.
- Benhabib, Jess & Rustichini, Aldo, 1994. "A note on a new class of solutions to dynamic programming problems arising in economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 18(3-4), pages 807-813.
- Haim Levy, 1992. "Stochastic Dominance and Expected Utility: Survey and Analysis," Management Science, INFORMS, vol. 38(4), pages 555-593, April.
- AMIR , Rabah, 1995.
"Continuous Stochastic Games of Capital Accumulation with Convex Transition,"
CORE Discussion Papers
1995009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Amir, Rabah, 1996. "Continuous Stochastic Games of Capital Accumulation with Convex Transitions," Games and Economic Behavior, Elsevier, vol. 15(2), pages 111-131, August.
- Stiglitz, Joseph E, 1970. "A Consumption-Oriented Theory of the Demand for Financial Assets and the Term Structure of Interest Rates," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 321-51, July.
- Gerhard Sorger, 2005. "A dynamic common property resource problem with amenity value and extraction costs," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(1), pages 3-19.
- Mirman, Leonard J & Spulber, Daniel F, 1985. "Fishery Regulation with Harvest Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 731-46, October.
- Benhabib, Jess & Radner, Roy, 1992. "The Joint Exploitation of a Productive Asset: A Game-Theoretic Approach," Economic Theory, Springer, vol. 2(2), pages 155-90, April.
- Dutta, Prajit K & Sundaram, Rangarajan, 1992. "Markovian Equilibrium in a Class of Stochastic Games: Existence Theorems for Discounted and Undiscounted Models," Economic Theory, Springer, vol. 2(2), pages 197-214, April.
- Dutta Prajit K. & Sundaram Rangarajan K., 1993. "How Different Can Strategic Models Be?," Journal of Economic Theory, Elsevier, vol. 60(1), pages 42-61, June.
- Christos Koulovatianos & Leonard J. Mirman, 2005.
"The Effects of Market Structure on Industry Growth: Rivalrous Non-excludable Capital,"
Vienna Economics Papers
0501, University of Vienna, Department of Economics.
- Koulovatianos, Christos & Mirman, Leonard J., 2007. "The effects of market structure on industry growth: Rivalrous non-excludable capital," Journal of Economic Theory, Elsevier, vol. 133(1), pages 199-218, March.
- Levhari, David & Michener, Ron & Mirman, Leonard J, 1981. "Dynamic Programming Models of Fishing: Competition," American Economic Review, American Economic Association, vol. 71(4), pages 649-61, September.
- Hahn, F H, 1970. "Savings and Uncertainty," Review of Economic Studies, Wiley Blackwell, vol. 37(1), pages 21-24, January.
- Gerhard Sorger, 1996.
"Markov Perfect Nash Equilibria in a Class of Resource Games,"
CIRANO Working Papers
- Gerhard Sorger, 1997. "Markov-perfect Nash equilibria in a class of resource games," Economic Theory, Springer, vol. 11(1), pages 79-100.
- Dockner, Engelbert J. & Sorger, Gerhard, 1996. "Existence and Properties of Equilibria for a Dynamic Game on Productive Assets," Journal of Economic Theory, Elsevier, vol. 71(1), pages 209-227, October.
- Mirman, Leonard J, 1971. "Uncertainty and Optimal Consumption Decisions," Econometrica, Econometric Society, vol. 39(1), pages 179-85, January.
- Chang, Fwu-Ranq, 1988. "The Inverse Optimal Problem: A Dynamic Programming Approach," Econometrica, Econometric Society, vol. 56(1), pages 147-72, January.
- Eric Fesselmeyer & Marc Santugini, 2011.
"Strategic Exploitation of a Common Resource under Environmental Risk,"
Cahiers de recherche
- Fesselmeyer, Eric & Santugini, Marc, 2013. "Strategic exploitation of a common resource under environmental risk," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 125-136.
- Eric Fesselmeyer & Marc Santugini, 2009. "Strategic Exploitation of a Common Resource under Environmental Risk," Cahiers de recherche 09-08, HEC Montréal, Institut d'économie appliquée, revised Feb 2012.
- Christos Koulovatianos, & Leonard J. Mirman & Marc Santugini, .
"Optimal Growth and Uncertainty: Learning,"
08/08, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Hiro Sakamoto, 2013. "A dynamic common-property resource problem with potential regime shifts," Discussion papers e-12-012, Graduate School of Economics Project Center, Kyoto University.
- Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.