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Pattern Formation, Spatial Externalities and Regulation in Coupled Economic-Ecological Systems

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  • Brock, William
  • Xepapadeas, Anastasios

Abstract

We develop a novel theoretical framework for studying ecosystems in which interacting state variables which are affected by management decisions diffuse in space. We identify (i) mechanisms creating spatial patterns when economic agents maximize profit at each site by ignoring the impact of their actions on other sites and (ii) a diffusion induced externality. Pattern formation mechanisms and externalities create a divergence in the spatiotemporal structures emerging under private or social objectives We develop optimal regulation which internalize the spatiotemporal externalities. Our theory is applied to the management and regulation of a semi-arid system. Supporting numerical simulations are also presented.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 9105.

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Date of creation: 11 Jun 2008
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Handle: RePEc:pra:mprapa:9105

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Keywords: Economic-Ecological Systems; Pattern Formation; Reaction-Diffusion; Diffusion Instability; Spatial Externalities; Regulation;

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  1. Goetz, Renan U. & Zilberman, David, 2000. "The dynamics of spatial pollution: The case of phosphorus runoff from agricultural land," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 143-163, January.
  2. James E. Wilen, 2007. "Economics of Spatial-Dynamic Processes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(5), pages 1134-1144.
  3. Stephen Polasky & Jeffrey D. Camm & Brian Garber-Yonts, 2001. "Selecting Biological Reserves Cost-Effectively: An Application to Terrestrial Vertebrate Conservation in Oregon," Land Economics, University of Wisconsin Press, vol. 77(1), pages 68-78.
  4. Costello, Christopher & Polasky, Stephen, 2008. "Optimal harvesting of stochastic spatial resources," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 1-18, July.
  5. Sanchirico, James N. & Wilen, James E., 1999. "Bioeconomics of Spatial Exploitation in a Patchy Environment," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 129-150, March.
  6. Sanchirico, James N. & Wilen, James E., 2001. "A Bioeconomic Model of Marine Reserve Creation," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 257-276, November.
  7. JunJie Wu & Bruce Babcock, 2001. "Spatial Heterogeneity and the Choice of Instruments to Control Nonpoint Pollution," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(2), pages 173-192, February.
  8. William A. Brock & Jose A. Scheinkman, 1974. "Global Asymptotic Stability of Optimal Control Systems with Applications to the Theory of Economic Growth," Discussion Papers 85, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Brock, William & Xepapadeas, Anastasios, 2008. "Diffusion-induced instability and pattern formation in infinite horizon recursive optimal control," Journal of Economic Dynamics and Control, Elsevier, vol. 32(9), pages 2745-2787, September.
  10. Sanchirico, James N. & Wilen, James E., 2005. "Optimal spatial management of renewable resources: matching policy scope to ecosystem scale," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 23-46, July.
  11. Costello, Christopher & Polasky, Stephen, 2004. "Dynamic reserve site selection," Resource and Energy Economics, Elsevier, vol. 26(2), pages 157-174, June.
  12. Smith, Martin D. & Wilen, James E., 2003. "Economic impacts of marine reserves: the importance of spatial behavior," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 183-206, September.
  13. Hochman, Eithan & Pines, David & Zilberman, David, 1977. "The Effects of Pollution Taxation on the Pattern of Resource Allocation: The Downstream Diffusion Case," The Quarterly Journal of Economics, MIT Press, vol. 91(4), pages 625-38, November.
  14. Feichtinger, Gustav & Novak, Andreas & Wirl, Franz, 1994. "Limit cycles in intertemporal adjustment models : Theory and applications," Journal of Economic Dynamics and Control, Elsevier, vol. 18(2), pages 353-380, March.
  15. Sanchirico, James N., 2005. "Additivity properties in metapopulation models: implications for the assessment of marine reserves," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 1-25, January.
  16. Smith, Martin D. & Sanchirico, James N. & Wilen, James E., 2009. "The economics of spatial-dynamic processes: Applications to renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 104-121, January.
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Citations

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Cited by:
  1. Klaus Desmet & Esteban Rossi-Hansberg, 2009. "Spatial Development," NBER Working Papers 15349, National Bureau of Economic Research, Inc.
  2. Carmen Camacho & Agustín Pérez-Barahona, 2012. "Land use dynamics and the environment," Documents de travail du Centre d'Economie de la Sorbonne 12012, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  3. Elena G. Irwin, 2010. "New Directions For Urban Economic Models Of Land Use Change: Incorporating Spatial Dynamics And Heterogeneity," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 65-91.
  4. XEPAPADEAS, Anastasios, 2009. "Modeling Complex Systems," MPRA Paper 17498, University Library of Munich, Germany.
  5. Behringer, Stefan & Upmann, Thorsten, 2014. "Optimal harvesting of a spatial renewable resource," Journal of Economic Dynamics and Control, Elsevier, vol. 42(C), pages 105-120.
  6. William Brock & Anastasios Xepapadeas & Athanasios Yannacopoulos, . "Robust Control of a Spatially Distributed Commercial Fishery," DEOS Working Papers 1303, Athens University of Economics and Business.
  7. Liu, Yanxu & Sims, Charles, 2013. "Spatial-Dynamic Externalities and Coordination in Invasive Species Control," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151293, Agricultural and Applied Economics Association.
  8. Anastasios Xepapadeas, . "Diffusion and Spatial Aspects," DEOS Working Papers 1232, Athens University of Economics and Business.
  9. Brock, William A. & Xepapadeas, Anastasios & Yannacopoulos, Athanasios N., 2014. "Spatial externalities and agglomeration in a competitive industry," Journal of Economic Dynamics and Control, Elsevier, vol. 42(C), pages 143-174.
  10. Brock, William & Xepapadeas, Anastasios, 2008. "General Pattern Formation in Recursive Dynamical Systems Models in Economics," MPRA Paper 12305, University Library of Munich, Germany.
  11. William Brock & Anastasios Xepapadeas & Athanasios Yannacopoulos, 2014. "Optimal Control in Space and Time and the Management of Environmental Resources," DEOS Working Papers 1402, Athens University of Economics and Business.
  12. repec:hal:journl:halshs-00674020 is not listed on IDEAS

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