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Strategic Exploitation of a Common-Property Resource under Uncertainty

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Author Info
Christos Koulovatianos ()
Elena Antoniadou ()
Leonard J.Mirman ()

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Abstract

We study the impact of uncertainty on the strategies and dynamics of symmetric noncooperative games among players who exploit a non-excludable resource that reproducesunder uncertainty. We focus on a particular class of games that deliver a unique Nash equilibrium in linear-symmetric strategies of resource exploitation. We show that, for this class of games, the tragedy of the commons is always present. For various changes in the riskiness of the random primitives of the model we provide general characterizations of features of the model that explain links between the degree of riskiness and strategic exploitation decisions. Finally, we provide a specific example that demonstrates the usefulness of our general results and, within the specific example, we study cases where increases in risk amplify or mitigate the tragedy of the commons.

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Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 0703.

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Date of creation: Jun 2007
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Handle: RePEc:vie:viennp:0703

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Find related papers by JEL classification:
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection

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  1. Socio-economics of Fisheries and Aquaculture
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Mirman, Leonard J & Spulber, Daniel F, 1985. "Fishery Regulation with Harvest Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 731-46, October. [Downloadable!] (restricted)
  2. Gerhard Sorger, 1996. "Markov Perfect Nash Equilibria in a Class of Resource Games," CIRANO Working Papers 96s-15, CIRANO. [Downloadable!]
    Other versions:
  3. Benhabib, Jess & Radner, Roy, 1992. "The Joint Exploitation of a Productive Asset: A Game-Theoretic Approach," Economic Theory, Springer, vol. 2(2), pages 155-90, April.
  4. Mirman, Leonard J, 1971. "Uncertainty and Optimal Consumption Decisions," Econometrica, Econometric Society, vol. 39(1), pages 179-85, January. [Downloadable!] (restricted)
  5. Dutta Prajit K. & Sundaram Rangarajan K., 1993. "How Different Can Strategic Models Be?," Journal of Economic Theory, Elsevier, vol. 60(1), pages 42-61, June. [Downloadable!] (restricted)
  6. Stiglitz, Joseph E, 1970. "A Consumption-Oriented Theory of the Demand for Financial Assets and the Term Structure of Interest Rates," Review of Economic Studies, Blackwell Publishing, vol. 37(3), pages 321-51, July. [Downloadable!] (restricted)
  7. Dutta, Prajit K & Sundaram, Rangarajan, 1992. "Markovian Equilibrium in a Class of Stochastic Games: Existence Theorems for Discounted and Undiscounted Models," Economic Theory, Springer, vol. 2(2), pages 197-214, April.
  8. Hanoch, G & Levy, Haim, 1969. "The Efficiency Analysis of Choices Involving Risk," Review of Economic Studies, Blackwell Publishing, vol. 36(107), pages 335-46, July. [Downloadable!] (restricted)
  9. Amir, Rabah, 1996. "Continuous Stochastic Games of Capital Accumulation with Convex Transitions," Games and Economic Behavior, Elsevier, vol. 15(2), pages 111-131, August. [Downloadable!] (restricted)
  10. Koulovatianos, Christos & Mirman, Leonard J., 2007. "The effects of market structure on industry growth: Rivalrous non-excludable capital," Journal of Economic Theory, Elsevier, vol. 133(1), pages 199-218, March. [Downloadable!] (restricted)
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  11. Stachurski, John, 2002. "Stochastic Optimal Growth with Unbounded Shock," Journal of Economic Theory, Elsevier, vol. 106(1), pages 40-65, September. [Downloadable!] (restricted)
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  12. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring. [Downloadable!] (restricted)
  13. Brock, William A. & Mirman, Leonard J., 1972. "Optimal economic growth and uncertainty: The discounted case," Journal of Economic Theory, Elsevier, vol. 4(3), pages 479-513, June. [Downloadable!] (restricted)
  14. Benhabib, Jess & Rustichini, Aldo, 1994. "A note on a new class of solutions to dynamic programming problems arising in economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 18(3-4), pages 807-813. [Downloadable!] (restricted)
  15. Levhari, David & Michener, Ron & Mirman, Leonard J, 1981. "Dynamic Programming Models of Fishing: Competition," American Economic Review, American Economic Association, vol. 71(4), pages 649-61, September. [Downloadable!] (restricted)
  16. Dockner, Engelbert J. & Sorger, Gerhard, 1996. "Existence and Properties of Equilibria for a Dynamic Game on Productive Assets," Journal of Economic Theory, Elsevier, vol. 71(1), pages 209-227, October. [Downloadable!] (restricted)
  17. Gerhard Sorger, 2005. "A dynamic common property resource problem with amenity value and extraction costs," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(1), pages 3-19. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Christos Koulovatianos & Leonard J. Mirman & Marc Santugini, 2007. "Optimal Growth and Uncertainty: Learning," Cahiers de recherche 07-05, HEC Montréal, Institut d'économie appliquée, revised Feb 2008. [Downloadable!]
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