Exogenous Productivity Shocks and Capital Investment in Common-pool Resources
We model exogenous technology shocks in common-pool industries using a compound Poisson process for total factor productivity. Rapid diï¿½usion of exogenous innovations is typical in the commons, but technology is rarely modeled this way. Technology shocks lower the equilibrium resource stock while causing capital buildup based on transitory proï¿½ts with myopic expectations. The steady state changes from a stable node to a shifting focus with boom and bust cycles, even if only technology is uncertain. A ï¿½sheries application is developed, but the results apply to many settings with discontinuous changes in value and open access with costly exit.
|Date of creation:||23 Sep 2010|
|Date of revision:|
|Contact details of provider:|| Postal: 9500 Gilman Drive, La Jolla, CA 92093-0508|
Phone: (858) 534-3383
Fax: (858) 534-7040
Web page: http://www.escholarship.org/repec/ucsdecon/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sennewald, Ken & Wälde, Klaus, 2005.
""Ito's Lemma" and the Bellman equation for Poisson processes: An applied view,"
W.E.P. - Würzburg Economic Papers
58, University of Würzburg, Chair for Monetary Policy and International Economics.
- Ken Sennewald & Klaus Wälde, 2006. "“Itô's Lemma” and the Bellman Equation for Poisson Processes: An Applied View," Journal of Economics, Springer, vol. 89(1), pages 1-36, October.
- Ken Sennewald & Klaus Wälde, 2006. "“Itô’s Lemma“ and the Bellman Equation for Poisson Processes: An Applied View," CESifo Working Paper Series 1684, CESifo Group Munich.
- Kerry Smith, V., 1972. "The implications of common property resources for technical change," European Economic Review, Elsevier, vol. 3(4), pages 469-479, December.
- Kenneth Hendricks & Dan Kovenock, 1989. "Asymmetric Information, Information Externalities, and Efficiency: The Case of Oil Exploration," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 164-182, Summer.
- Berck, Peter & Perloff, Jeffrey M, 1984.
"An Open-Access Fishery with Rational Expectations,"
Econometric Society, vol. 52(2), pages 489-506, March.
- Berck, Peter & Perloff, Jeffrey M, 1982. "An Open-Access Fishery with Rational Expectations," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt876499mq, Department of Agricultural & Resource Economics, UC Berkeley.
- Hannesson, Rognvaldur, 2007. "Growth accounting in a fishery," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 364-376, May.
- Dale Squires, 1992. "Productivity Measurement in Common Property Resource Industries: An Application to the Pacific Coast Trawl Fishery," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 221-236, Summer.
- Dale Squires & Niels Vestergaard, 2013. "Technical Change and The Commons," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1769-1787, December.
- Clark, Colin W & Clarke, Frank H & Munro, Gordon R, 1979. "The Optimal Exploitation of Renewable Resource Stocks: Problems of Irreversible Investment," Econometrica, Econometric Society, vol. 47(1), pages 25-47, January.
- Daniel R. Siegel, 1985. "Estimating Potential Social Losses from Market Failure: Oil Exploration in Alberta," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 537-552, Winter.
- Homans, Frances R. & Wilen, James E., 1997. "A Model of Regulated Open Access Resource Use," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 1-21, January.
- Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-93, June.
- Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
- Baltagi, Badi H & Griffin, James M, 1988. "A General Index of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 20-41, February.
- Pankaj Tandon, 1983. "Rivalry and the Excessive Allocation of Resources to Research," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 152-165, Spring.
When requesting a correction, please mention this item's handle: RePEc:cdl:ucsdec:qt1qp1g9ts. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff)
If references are entirely missing, you can add them using this form.