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The Biodiversity Bargaining Problem

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Author Info

  • Gatti, J.R.J.
  • Goeschl, T.
  • Groom, B.
  • Timothy Swanson

Abstract

This paper describes global biodiversity conservation as a co-operative bargaining problem. We model an interdependent ‘technology rich’ North and a ‘gene rich’ South who must co-operate in the biotechnology sector in order to combine their unique and essential resources and maximise global surplus. Chief among the ideas presented here is that, in a manner similar to the ‘rational threats’ idea posited by Nash (1953), and in line with observations of pre-contractual bargaining over biodiversity conservation in Latin America (World Bank 2003), destruction of biological resources represents a real source of bargaining power to the South in determining the bargaining outcome. Not only this, but current institutional arrangements relevant to the biodiversity bargaining problem, namely the incremental cost approach enshrined in the CBD and IPRs for innovation enshrined in TRIPS, can be shown to offer a second-best solution. These arrangements may induce the strategic incentives in the game of surplus division.

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Bibliographic Info

Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0447.

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Length: 52
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:cam:camdae:0447

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Web page: http://www.econ.cam.ac.uk/index.htm

Related research

Keywords: North-South bargaining; biodiversity conservation; biotechnology; Convention on Biodiversity (CBD); contracts; Intellectual Property Rights (IPRs);

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References

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  1. Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
  2. Ilhem Kassar & Pierre Lasserre, 2002. "Species Preservation and Biodiversity Value: A Real Options Approach," Cahiers de recherche du Département des sciences économiques, UQAM 20-18, Université du Québec à Montréal, Département des sciences économiques.
  3. Lutz-Alexander Bush & Shouyong Shi & Quan Wen, 1998. "Bargaining with Surplus Destruction," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 915-932, November.
  4. King, K., 1994. "The Incremental Costs of Global Environmental Benefits," Papers 5, World Bank - Global Environment Facility.
  5. Scott Barrett, 1994. "The biodiversity supergame," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(1), pages 111-122, February.
  6. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
  7. Polasky, Stephen & Costello, Christopher & McAusland, Carol, 2004. "On trade, land-use, and biodiversity," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 911-925, September.
  8. Swanson, Timothy, 1996. "The reliance of northern economies on southern biodiversity: biodiversity as information," Ecological Economics, Elsevier, vol. 17(1), pages 1-8, April.
  9. Susanne Droege & Birgit Soete, 2001. "Trade-Related Intellectual Property Rights, North-South Trade, and Biological Diversity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(2), pages 149-163, June.
  10. Timo Goeschl & Timothy Swanson, 2002. "The Social Value of Biodiversity for R&D," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(4), pages 477-504, August.
  11. Timo Goeschl & Timothy Swanson, 2003. "Pests, Plagues, and Patents," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 561-575, 04/05.
  12. Angelsen, Arild & Kaimowitz, David, 1999. "Rethinking the Causes of Deforestation: Lessons from Economic Models," World Bank Research Observer, World Bank Group, vol. 14(1), pages 73-98, February.
  13. Timo Goeschl & Timothy Swanson, 2003. "On Biology and Technology: The Economics of Managing Biotechnologies," Working Papers 2003.42, Fondazione Eni Enrico Mattei.
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Cited by:
  1. Charles Figuières & Solenn Leplay & Estelle Midler & Sophie Thoyer, 2010. "The REDD scheme to curb deforestation: A well-designed system of incentives?," Working Papers 10-06, LAMETA, Universtiy of Montpellier, revised Jun 2010.
  2. Oliver Deke, 2004. "Financing National Protected Area Networks Internationally � The Global Environment Facility as a Multilateral Mechanism of Transfer," Kiel Working Papers 1227, Kiel Institute for the World Economy.
  3. Winands, Sarah & Holm-Müller, Karin & Weikard, Hans-Peter, 2013. "The biodiversity conservation game with heterogeneous countries," Ecological Economics, Elsevier, vol. 89(C), pages 14-23.
  4. Tim Swanson & Ben Groom, 2012. "Regulating global biodiversity: what is the problem?," Oxford Review of Economic Policy, Oxford University Press, vol. 28(1), pages 114-138, Spring.

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