Managing a common renewable resource in asymetric information
AbstractThe clear definition of property rights is not a sufficient condition to prevent congestion effects in commons. In this paper we present how interesting can be the coordination among owners in the preservation of the common good. Our approach takes into account economic dynamics and incentive mechanisms in a hidden information context. We consider a natural resource which is being used up for a continuum of producers on a common property regime. We also consider that each producer has an individual performance index which is a hidden information of the rest of players. We introduce coordination in the sense of a global maximization of the joint profit. If there is no coordination among the producers, their behavior leads to complete rent dissipation. We focus our model in the case of the producers convinced to coordinate their actions in order to preserve their own economic sustainability. Under perfect information we find that the exclusion of at subset of producers can appear and how it is endogenously determined. Under asymmetric information we propose a quantity-transfer contract which lead us to the previous stationary disposal stock of the resource without exclusion.
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Bibliographic InfoPaper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2003-18.
Date of creation: 2003
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- Catro, D. Fuentes & Jayet, Pierre-Alain & Rotillon, Gilles, 2000. "Managing a Common Renewable Resource in Asymmetric Information," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24893, European Association of Agricultural Economists.
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- Jean Tirole & Jean-Jaques Laffont, 1985.
"Using Cost Observation to Regulate Firms,"
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- Bourgeon, Jean-Marc & Jayet, Pierre-Alain & Picard, Pierre, 1995. "An incentive approach to land set-aside programs," European Economic Review, Elsevier, vol. 39(8), pages 1487-1509, October.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
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