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Long-Term Competition in a Dynamic Game: The Cold Fish War

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  • Jonathan Cave

Abstract

This article presents a model of credible, voluntary, collective agreements in a dynamic game. These agreements are implicit in collections of history-dependent (threat) strategies. I consider the strategies in a game of resource exploitation. Credibility is represented by perfect equilibrium. Voluntarism requires at least that all behavior be supported by the threat of collapse of the agreement, which would return the players to the memoryless equilibrium. Collective rationality requires that the agreement be robust to the possibility of mutually beneficial renegotiation. I analyze the set of agreements meeting each of these restrictions.

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  • Jonathan Cave, 1987. "Long-Term Competition in a Dynamic Game: The Cold Fish War," RAND Journal of Economics, The RAND Corporation, vol. 18(4), pages 596-610, Winter.
    • Handle: RePEc:rje:randje:v:18:y:1987:i:winter:p:596-610
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    Cited by:

    1. De Luca, Giacomo & Sekeris, Petros G. & Spengler, Dominic E., 2018. "Can violence harm cooperation? Experimental evidence," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 342-359.
    2. Anne-Sarah Chiambretto & Hubert Stahn, 2017. "Voluntary Management of Fisheries under an Uncertain Background Legislative Threat," AMSE Working Papers 1712, Aix-Marseille School of Economics, France.
    3. Klis, Anna A. & Melstrom, Richard T., 2020. "Strategic behavior and dynamic externalities in commercial fisheries," Ecological Economics, Elsevier, vol. 169(C).
    4. Harrison, Rodrigo & Lagunoff, Roger, 2019. "Tipping points and business-as-usual in a global commons," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 386-408.
    5. Colombo, Luca & Labrecciosa, Paola, 2019. "Stackelberg versus Cournot: A differential game approach," Journal of Economic Dynamics and Control, Elsevier, vol. 101(C), pages 239-261.
    6. Chisik, Richard, 2003. "Gradualism in free trade agreements: a theoretical justification," Journal of International Economics, Elsevier, vol. 59(2), pages 367-397, March.
    7. Rodrigo Harrison & Roger Lagunoff, 2017. "Dynamic Mechanism Design For A Global Commons," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(3), pages 751-782, August.
    8. Tarui, Nori & Mason, Charles F. & Polasky, Stephen & Ellis, Greg, 2008. "Cooperation in the commons with unobservable actions," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 37-51, January.
    9. AMIR, Rabah, 2001. "Stochastic games in economics and related fields: an overview," LIDAM Discussion Papers CORE 2001060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Mitri Kitti, 2011. "Conditionally Stationary Equilibria in Discounted Dynamic Games," Dynamic Games and Applications, Springer, vol. 1(4), pages 514-533, December.
    11. Rabah Amir & Niels Nannerup, 2006. "Information Structure and the Tragedy of the Commons in Resource Extraction," Journal of Bioeconomics, Springer, vol. 8(2), pages 147-165, August.
    12. Mirman, Leonard J. & To, Ted, 2005. "Strategic resource extraction, capital accumulation and overlapping generations," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 378-386, September.
    13. Rodrigo Harrison & Roger Lagunoff, 2015. "Tipping Points and Business-as-Usual in a Global Carbon Commons," Working Papers gueconwpa~15-15-01, Georgetown University, Department of Economics, revised 12 Jul 2015.
    14. Raul P. Lejano & Helen Ingram, 2012. "Modeling the commons as a game with vector payoffs," Journal of Theoretical Politics, , vol. 24(1), pages 66-89, January.
    15. Petros G. Sekeris, 2014. "The tragedy of the commons in a violent world," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 521-532, September.
    16. Calvo, Emilio & Rubio, Santiago J., 2013. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," International Review of Environmental and Resource Economics, now publishers, vol. 6(4), pages 289-339, April.
    17. Ben White, 2000. "A Review of the Economics of Biological Natural Resources," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(3), pages 419-462, September.
    18. Richard Chisik & Ronald B. Davies, 2004. "Gradualism In Tax Treaties With Irreversible Foreign Direct Investment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(1), pages 113-139, February.
    19. Msangi, Siwa, 2005. "Measuring the Gains to Groundwater Management with Recursive Utility," 2005 Annual meeting, July 24-27, Providence, RI 19212, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. David G. Pearce, 1991. "Repeated Games: Cooperation and Rationality," Cowles Foundation Discussion Papers 983, Cowles Foundation for Research in Economics, Yale University.
    21. Breton, Michèle & Keoula, Michel Yevenunye, 2014. "A great fish war model with asymmetric players," Ecological Economics, Elsevier, vol. 97(C), pages 209-223.

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