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The land allocation game: Externalities and evolutionary competition

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  • Antoci, Angelo
  • Iannucci, Gianluca
  • Rocchi, Benedetto
  • Ticci, Elisa

Abstract

This study examines the dynamics and effects of land allocation choices between two different agricultural sectors, A and B, in an evolutionary context and under sectoral interdependencies. The analysis of the proposed model identifies three possible scenarios. In the first scenario, where the expansion of one sector A generates negative effects on both sectors, the outcome may be a “poverty trap”. In the second scenario, a “symbiotic” relationship between sectors exists: profits in sector A (B) increase if sector B (A) expands. This enables a stable and Pareto-superior economic diversification in the regional economy. In the third scenario, a change in land use towards sector A (B) generates negative market externalities on sector B (A); this context favors the specialization in one of the two sectors. For each scenario, policy implications and empirical examples are discussed.

Suggested Citation

  • Antoci, Angelo & Iannucci, Gianluca & Rocchi, Benedetto & Ticci, Elisa, 2023. "The land allocation game: Externalities and evolutionary competition," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 124-133.
    • Handle: RePEc:eee:streco:v:64:y:2023:i:c:p:124-133
    DOI: 10.1016/j.strueco.2022.12.003
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