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Inequality And Conservation On The Local Commons: A Theoretical Exercise

  • Jeff Dayton-Johnson

    (Dalhousie University)

  • Pranab Bardhan

    (University of California, Berkeley)

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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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 481 (July)
Pages: 577-602

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Handle: RePEc:ecj:econjl:v:112:y:2002:i:481:p:577-602
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  1. Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998. "Voluntary Provision of Public Goods," McMaster Experimental Economics Laboratory Publications 1998-02, McMaster University.
  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.
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  9. 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.
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  11. 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.
  12. 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.
  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.
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