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Regulation and Evolution of Harvesting Rules and Compliance in Common Pool Resources

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Abstract

The present paper models jointly the evolution of compliance to regulation and the evolution of the CPR stock in the context of an evolutionary process emerging from combining replicator dynamics, which describe the adoption of harvesting rules, with resource stock dynamics. This evolutionary approach characterizes the emergence of steady-state equilibrium harvesting rules or compliance levels under regulation, and the corresponding behavior of the steady-state equilibrium resource stock. This evolutionary approach suggests that coexistence of both cooperative and non-cooperative rules under regulation is possible. It is shown that stock effects on profits and a certain structure of auditing probabilities, could imply the emergence of a limit cycle in areas of low stock levels, as an equilibrium outcome for the level of compliance and the biomass stock. It is also shown that it is possible to modify regulation, by modifying penalties for regulatory violations, in order to attain full compliance equilibria and take the system out of low stock traps. It shown it might be easier for the regulator to obtain the full compliance if there is precommitment to fixed auditing probabilities.

Suggested Citation

  • Anastasios Xepapadeas, 2003. "Regulation and Evolution of Harvesting Rules and Compliance in Common Pool Resources," Economic Working Papers at Centro de Estudios Andaluces E2003/39, Centro de Estudios Andaluces.
  • Handle: RePEc:cea:doctra:e2003_39
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    File URL: http://public.centrodeestudiosandaluces.es/pdfs/E200339.pdf
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    References listed on IDEAS

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    4. Stranlund, John K. & Dhanda, Kanwalroop Kathy, 1999. "Endogenous Monitoring and Enforcement of a Transferable Emissions Permit System," Journal of Environmental Economics and Management, Elsevier, vol. 38(3), pages 267-282, November.
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    7. Franckx, Laurent, 2002. "The Use of Ambient Inspections in Environmental Monitoring and Enforcement When the Inspection Agency Cannot Commit Itself to Announced Inspection Probabilities," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 71-92, January.
    8. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-788, September.
    9. Smith, Vernon L, 1971. "Economics of Production from Natural Resources: Reply," American Economic Review, American Economic Association, vol. 61(3), pages 488-491, June.
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    Cited by:

    1. Anastasios Xepapadeas & Constadina Passa, 2004. "Participation in and Compliance with Public Voluntary Environmental Programs: An Evolutionary Approach," Working Papers 0403, University of Crete, Department of Economics.
    2. Anastasios Xepapadeas & Constadina Passa, 2005. "Design of Public Voluntary Environmental Programs for Nitrate Pollution in Agriculture: An Evolutionary Approach," Working Papers 0512, University of Crete, Department of Economics.

    More about this item

    Keywords

    Common pool resources; harvesting; regulation; replicator dynamics; compliance;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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