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Optimal Phosphorus Management in a Transboundary Setting: A Dynamic Game Approach

Author

Listed:
  • Cho, Chanheung
  • Schunk, Nathan
  • Brown, Zachary S.
  • Sohngen, Brent
  • Baker, Justin S.

Abstract

Phosphorus (P) runoff from agriculture is a major driver of eutrophication in trans-boundary water systems like Lake Erie. This paper develops a dynamic game model to examine how strategic interactions between the U.S. and Canada shape long-term crop production and environmental outcomes under stochastic soil P dynamics. The results show that while unilateral decisions often lead to higher crop production, they also result in greater environmental damage due to excessive P runoff. In contrast, incorporating transboundary nutrient spillovers naturally reduces P application and mitigates environmental harm, though at the cost of lower production. These findings suggest the importance of integrating biophysical feedback and economic incentives in nutrient management, emphasizing that long-term sustainability requires balancing productivity with environmental constraints.

Suggested Citation

  • Cho, Chanheung & Schunk, Nathan & Brown, Zachary S. & Sohngen, Brent & Baker, Justin S., 2025. "Optimal Phosphorus Management in a Transboundary Setting: A Dynamic Game Approach," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360742, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:360742
    DOI: 10.22004/ag.econ.360742
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    References listed on IDEAS

    as
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    2. Cho, Chanheung & Brown, Zachary S. & Kling, David M. & Gatiboni, Luke & Baker, Justin S., 2025. "Evaluating Optimal Farm Management of Phosphorus Fertilizer Inputs with Partial Observability of Legacy Soil Stocks," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361213, Agricultural and Applied Economics Association.
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    5. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
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    7. Xabadia, Angels & Goetz, Renan U. & Zilberman, David, . "AJAE appendix for ‘The Gains from Differentiated Policies to Control Stock Pollution when Producers Are Heterogeneous’," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(4), pages 1-9.
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