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Spatial concessions with limited tenure

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  • Nicolas Querou
  • Agnes Tomini
  • Christopher Costello

Abstract

We examine theoretically a system of spatially-connected natural resource concessions with limited tenure. The resource migrates around the system and thus induces a spatial externality, so complete decentralization will not solve the tragedy of the commons. We analyze a system in which conces-sions can be renewed, but only if their owners maintain resource stocks above a pre-defined target. We show that this instrument improves upon the decentralized property right solution and can replicate (under general conditions) the socially optimal extraction path in every patch, in perpetu-ity. The duration of tenure and the dispersal of the resource play pivotal roles in whether this instrument achieves the socially optimal outcome, and sustains cooperation of all concessionaires.

Suggested Citation

  • Nicolas Querou & Agnes Tomini & Christopher Costello, 2016. "Spatial concessions with limited tenure," Working Papers 01-16, LAMETA, Universtiy of Montpellier.
    • Handle: RePEc:lam:wpaper:01-16
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    References listed on IDEAS

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