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Land Use and Decentralized Government: A Strategic Approach for Playing a Short-Sighted Equilibrium

Author

Listed:
  • Maria Carmela Aprile
  • Bruno Chiarini
  • Elisabetta Marzano

Abstract

This paper presents a simple strategic model (defined as a shortsighted game) to highlight the incentives for local governments to allow the exploitation of land in areas not suitable for such exploitation due to environmental or other risks. Municipal discretionary policy inevitably produces strategic complementarities and guides individuals to use the land (to choose the most beneficial “shortsighted” Nash equilibrium). In light of these results, it seems possible to state that the definition of non-exploitable territory and the decisions concerning it should not be left to local governments.

Suggested Citation

  • Maria Carmela Aprile & Bruno Chiarini & Elisabetta Marzano, 2018. "Land Use and Decentralized Government: A Strategic Approach for Playing a Short-Sighted Equilibrium," CESifo Working Paper Series 7344, CESifo.
    • Handle: RePEc:ces:ceswps:_7344
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    References listed on IDEAS

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    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
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    5. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, December.
    6. Vives, Xavier, 1997. "Learning from Others: A Welfare Analysis," Games and Economic Behavior, Elsevier, vol. 20(2), pages 177-200, August.
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    2. Fa Tian & Shiying Hou, 2022. "The Impact of Green Finance on Industrial Land Use Efficiency: Evidence from 279 Cities in China," Sustainability, MDPI, vol. 14(10), pages 1-16, May.

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    More about this item

    Keywords

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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