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Inequality and Conservation on the Local Commons: A Theoretical Exercise

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  • Jeff Dayton-Johnson and Pranab Bardhan.

Abstract

To analyse the effect of asset inequality on co--operation within a group, we consider a two--player nonco--operative model of conservation of a common--pool resource. Overexploitation by one user affects another"s payoff by reducing the next--period catch. We give necessary and sufficient conditions such that conservation is a Nash equilibrium, and show that increasing inequality does not, in general, favour full conservation. However, once inequality is sufficiently great, further inequality can raise efficiency. Thus, the relationship between inequality and economic efficiency is U--shaped. Finally, we analyse the implications for conservation if players have earning opportunities outside the commons. Copyright 2002 Royal Economic Society

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Bibliographic Info

Paper provided by University of California at Berkeley in its series Center for International and Development Economics Research (CIDER) Working Papers with number C96-071.

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Date of creation: 01 Jun 1996
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Handle: RePEc:ucb:calbcd:c96-071

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References

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  1. David Feeny & Susan Hanna & Arthur F. McEvoy, 1996. "Questioning the Assumptions of the "Tragedy of the Commons" Model of Fisheries," Land Economics, University of Wisconsin Press, vol. 72(2), pages 187-205.
  2. Pranab Bardhan and Maitreesh Ghatak., 1999. "Inequality, Market Imperfections, and Collective Action Problems," Center for International and Development Economics Research (CIDER) Working Papers C99-108, University of California at Berkeley.
  3. Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998. "Voluntary Provision of Public Goods," McMaster Experimental Economics Laboratory Publications 1998-02, McMaster University.
  4. Bardhan, Pranab, 2000. "Irrigation and Cooperation: An Empirical Analysis of 48 Irrigation Communities in South India," Economic Development and Cultural Change, University of Chicago Press, vol. 48(4), pages 847-65, July.
  5. Bliss, Christopher & Nalebuff, Barry, 1984. "Dragon-slaying and ballroom dancing: The private supply of a public good," Journal of Public Economics, Elsevier, vol. 25(1-2), pages 1-12, November.
  6. Pranab Bardhan., 1993. "Rational Fools and Cooperation in a Poor Hydraulic Economy," Center for International and Development Economics Research (CIDER) Working Papers C93-015, University of California at Berkeley.
  7. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
  8. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-88, September.
  9. Benhabib, Jess & Rustichini, Aldo, 1996. " Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-42, March.
  10. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  11. Itaya, Jun-ichi & de Meza, David & Myles, Gareth D., 1997. "In praise of inequality: public good provision and income distribution," Economics Letters, Elsevier, vol. 57(3), pages 289-296, December.
  12. Johnson, Ronald N & Libecap, Gary D, 1982. "Contracting Problems and Regulation: The Case of the Fishery," American Economic Review, American Economic Association, vol. 72(5), pages 1005-22, December.
  13. Shanmugaratnam, N. & Vedeld, T. & Mossige, A. & Bovin, M., 1992. "Resource Management and Pastoral Institution Building in West African Sahel," World Bank - Discussion Papers 175, World Bank.
  14. Baland, Jean-Marie & Platteau, Jean-Philippe, 2000. "Halting Degradation of Natural Resources: Is There a Role for Rural Communities?," OUP Catalogue, Oxford University Press, number 9780198290612, September.
  15. Baland, J-M & Platteau, J-P, 1997. "Wealth Inequality and Efficiency in the Commons," Papers 193, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  16. Pranab Bardhan, 1993. "Symposium on Management of Local Commons," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 87-92, Fall.
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