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A Differential Game Approach to Adoption of Conservation Practices

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  • Parcell, Joseph L.
  • Gedikoglu, Haluk

Abstract

Agricultural production can degrade water sources through leaching of nitrogen and phosphorus from agricultural land to surface and ground water sources. To minimize the pollution from agricultural production, the U.S. Department of Agriculture promotes adoption of conservation practices. Previous studies that analyzed adoption of new technologies did not incorporate the two important features of technologies that are primarily used to conserve the environment; common resource and interaction between farmers. The current study develops a conceptual framework using a differential game to analyze adoption of new technologies that impact the water quality. The results of the current study show that the single agent optimization models of the previous studies would not lead to the optimal solution of the differential game. Current study also shows that if farmers act cooperatively, they devote more capital to conserve the environment.

Suggested Citation

  • Parcell, Joseph L. & Gedikoglu, Haluk, 2013. "A Differential Game Approach to Adoption of Conservation Practices," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149619, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:149619
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    File URL: http://purl.umn.edu/149619
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    References listed on IDEAS

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    1. Huffman, Wallace E, 1980. "Farm and Off-Farm Work Decisions: The Role of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 14-23, February.
    2. Khalatbari, Firauzeh, 1977. "Market Imperfections and the Optimum Rate of Depletion of Natural Resources," Economica, London School of Economics and Political Science, vol. 44(176), pages 409-414, November.
    3. Joseph C. Cooper & Russ W. Keim, 1996. "Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 54-64.
    4. Sunding, David & Zilberman, David, 2001. "The agricultural innovation process: Research and technology adoption in a changing agricultural sector," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 4, pages 207-261 Elsevier.
    5. Goetz, Renan U. & Zilberman, David, 2000. "The dynamics of spatial pollution: The case of phosphorus runoff from agricultural land," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 143-163, January.
    6. Ulph, Alistair, 1989. "A Review of Books on Resource and Environmental Economics," Bulletin of Economic Research, Wiley Blackwell, vol. 41(3), pages 219-228, July.
    7. Feder, Gershon & Just, Richard E & Zilberman, David, 1985. "Adoption of Agricultural Innovations in Developing Countries: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 255-298, January.
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    Keywords

    Technology Adoption; Water Quality; Optimal Control; Differential Game; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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