The Double Curse of a Common Property Productive Asset Oligopoly
AbstractWe build a subgame perfect Nash equilibrium of a common property productive asset oligopoly. We derive two surprising results. First, the steady state level of asset can be a decreasing function of the asset’s implicit growth rate. This phenomenon arises when the initial stock of asset is below a certain threshold. It represents a double curse for a common property productive asset where the well-known tragedy of the commons due to a lack of property rights is exacerbated by an increase in the productivity of the asset. Second, we show that a reduction in the number of firms exploiting the asset can, in the short run, result in an increase of the industry’s exploitation and a decrease of the level of the asset’s stock.
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Bibliographic InfoPaper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 02-2005.
Length: 31 pages
Date of creation: 2005
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productive asset; oligopoly; tragedy of the commons; dynamic games;
Other versions of this item:
- Benchekroun, Hassan, 2008. "Comparative dynamics in a productive asset oligopoly," Journal of Economic Theory, Elsevier, vol. 138(1), pages 237-261, January.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
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