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Asymmetric information may protect the commons: The welfare benefits of uninformed regulators

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  • Espínola-Arredondo, Ana
  • Muñoz-García, Félix

Abstract

We examine an entry-deterrence model in the commons. We investigate in which contexts asymmetric information among firms becomes welfare improving, and in which settings an uninformed regulator may prefer to assess and disseminate information about the available stock among firms.

Suggested Citation

  • Espínola-Arredondo, Ana & Muñoz-García, Félix, 2013. "Asymmetric information may protect the commons: The welfare benefits of uninformed regulators," Economics Letters, Elsevier, vol. 121(3), pages 463-467.
    • Handle: RePEc:eee:ecolet:v:121:y:2013:i:3:p:463-467
    DOI: 10.1016/j.econlet.2013.09.032
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    References listed on IDEAS

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    1. 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 507-525, May.
    2. Nicolas Faysse, 2005. "Coping With The Tragedy Of The Commons: Game Structure And Design Of Rules," Post-Print cirad-01002167, HAL.
    3. Jérémy Laurent-Lucchetti & Justin Leroux & Bernard Sinclair-Desgagné, 2011. "Splitting an Uncertain (Natural) Capital," Cahiers de recherche 1105, CIRPEE.
    4. Espínola-Arredondo, Ana & Muñoz-García, Félix, 2011. "Can incomplete information lead to under-exploitation in the commons?," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 402-413.
    5. 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.
    6. 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, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Entry deterrence; Signaling; Commons; Welfare;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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