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Group inefficiency in a common property resource game with asymmetric players

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  • Marín-Solano, Jesús

Abstract

If the joint preferences of asymmetric players having different discount rates are represented by the sum of intertemporal utilities, they become time-inconsistent. It is shown how time-consistent solutions for this problem can be strongly inefficient: the sum of payoffs can be higher if cooperation or coordination is forbidden than if it is allowed.

Suggested Citation

  • Marín-Solano, Jesús, 2015. "Group inefficiency in a common property resource game with asymmetric players," Economics Letters, Elsevier, vol. 136(C), pages 214-217.
    • Handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:214-217
    DOI: 10.1016/j.econlet.2015.10.002
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    References listed on IDEAS

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    1. Krusell, Per & Kuruscu, Burhanettin & Smith, Anthony Jr., 2002. "Equilibrium Welfare and Government Policy with Quasi-geometric Discounting," Journal of Economic Theory, Elsevier, vol. 105(1), pages 42-72, July.
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    3. Karp, Larry, 1996. "Monopoly Power Can Be Disadvantageous in the Extraction of a Durable Nonrenewable Resource," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 825-849, November.
    4. Hiraguchi, Ryoji, 2014. "A Note On The Analytical Solution To The Neoclassical Growth Model With Leisure," Macroeconomic Dynamics, Cambridge University Press, vol. 18(2), pages 473-479, March.
    5. Rogoff, Kenneth, 1985. "Can international monetary policy cooperation be counterproductive?," Journal of International Economics, Elsevier, vol. 18(3-4), pages 199-217, May.
    6. Maskin, Eric S & Newbery, David M, 1990. "Disadvantageous Oil Tariffs and Dynamic Consistency," American Economic Review, American Economic Association, vol. 80(1), pages 143-156, March.
    7. Ekeland, Ivar & Karp, Larry & Sumaila, Rashid, 2015. "Equilibrium resource management with altruistic overlapping generations," Journal of Environmental Economics and Management, Elsevier, vol. 70(C), pages 1-16.
    8. Sorger, Gerhard, 2006. "Recursive Nash bargaining over a productive asset," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2637-2659, December.
    9. Hiraguchi, Ryoji, 2014. "On the neoclassical growth model with non-constant discounting," Economics Letters, Elsevier, vol. 125(2), pages 175-178.
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    More about this item

    Keywords

    Asymmetric players; Heterogeneous discounting; Group inefficiency; Differential games; Resource games;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General

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