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Asymmetric Information may Protect the Commons: The Welfare Benefits of Uniformed Regulators

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  • Ana Espinola-Arredondo
  • Felix Munoz-Garcia

    ()
    (School of Economic Sciences, Washington State University)

Abstract

We examine an entry-deterrence model in the commons. We investigate in which contexts the presence of asymmetric information among the fi?rms exploiting the commons becomes welfare improving, relative to complete information, and in which settings an uninformed regulator might have incentives to assess and disseminate the available stock among potential entrants.

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File URL: http://faculty.ses.wsu.edu/WorkingPapers/Munoz/WP2013-8.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2013-8.

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Length: 10 pages
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Date of revision:
Handle: RePEc:wsu:wpaper:munoz-14

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Keywords: Cost asymmetries; Entry Deterrence; Signaling; Commons; Welfare;

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  1. Ana Espinola-Arredondo & Felix Munoz-Garcia, 2010. "Can Incomplete Information Lead to Under-exploitation in the Commons," Working Papers 2010-04, School of Economic Sciences, Washington State University.
  2. Jérémy Laurent-Lucchetti & Justin Leroux & Bernard Sinclair-Desgagné, 2011. "Splitting an Uncertain (Natural) Capital," Cahiers de recherche 1105, CIRPEE.
  3. Mason, Charles F & Polasky, Stephen, 1994. "Entry Deterrence in the Commons," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 507-25, May.
  4. Polasky, Stephen & Bin, Okmyung, 2001. "Entry Deterrence and Signaling in a Nonrenewable Resource Model," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 235-256, November.
  5. Nicolas Faysse, 2005. "Coping with the Tragedy of the Commons: Game Structure and Design of Rules," Journal of Economic Surveys, Wiley Blackwell, vol. 19(2), pages 239-261, 04.
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