The road to extinction: commons with capital markets
Competitive agents extract in continuous time from a commons. Capital market access allows them to both save and borrow against their extraction stream. When the commons asset grows more quickly than the privately stored one, multiple equilibria are found for intermediate commons endowments. One of these has the extinction date and welfare decrease in the endowment, a resource curse. When the commons asset grows less quickly than the privately stored one, there is a unique extinction date for each endowment level. In the limit, as marginal extraction costs become constant, `jump extinctions' occur. In cases with multiple equilibria: welfare is increased for low initial stock levels when agents do not have access to capital markets, but decreased otherwise; and an extraction tax reduces welfare in the `cursed' equilibrium, increases it in the other finite extinction equilibrium and expands the set of commons stocks that are never extinguished
|Date of creation:||11 Aug 2004|
|Date of revision:|
|Contact details of provider:|| Phone: 1 212 998 3820|
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.aspEmail:
More information through EDIRC
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.:
- Dockner, Engelbert J. & Sorger, Gerhard, 1996. "Existence and Properties of Equilibria for a Dynamic Game on Productive Assets," Journal of Economic Theory, Elsevier, vol. 71(1), pages 209-227, October.
- Arvind Subramanian & Xavier Sala-i-Martin, 2003.
"Addressing the Natural Resource Curse; An Illustration From Nigeria,"
IMF Working Papers
03/139, International Monetary Fund.
- Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 570-615, August.
- Xavier Sala-i-Martin & Arvind Subramanian, 2003. "Addressing the Natural Resource Curse: An Illustration from Nigeria," NBER Working Papers 9804, National Bureau of Economic Research, Inc.
- Xavier Sala-i-Martín & Arvind Subramanian, 2003. "Addressing the natural resource curse: An illustration from Nigeria," Economics Working Papers 685, Department of Economics and Business, Universitat Pompeu Fabra.
- Xavier Sala-i-Martin & Arvind Subramanian, 2003. "Addressing the natural resource curse: An illustration from Nigeria," Discussion Papers 0203-15, Columbia University, Department of Economics.
- repec:cup:cbooks:9780521637329 is not listed on IDEAS
- Gourinchas, Pierre-Olivier & Jeanne, Olivier, 2003.
"The Elusive Gains from International Financial Integration,"
CEPR Discussion Papers
3902, C.E.P.R. Discussion Papers.
- Pierre-Olivier Gourinchas & Olivier Jeanne, 2006. "The Elusive Gains from International Financial Integration," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 715-741.
- Pierre-Olivier Gourinchas & Olivier Jeanne, 2004. "The Elusive Gains From International Financial Integration," IMF Working Papers 04/74, International Monetary Fund.
- Pierre-Olivier Gourinchas & Olivier Jeanne, 2003. "The Elusive Gains from International Financial Integration," NBER Working Papers 9684, National Bureau of Economic Research, Inc.
- Sinn, Hans-Werner, 1984. "Common Property Resources, Storage Facilities and Ownership Structures: A Cournot Model of the Oil Market," Economica, London School of Economics and Political Science, vol. 51(23), pages 235-52, August.
- Benhabib, Jess & Radner, Roy, 1992. "The Joint Exploitation of a Productive Asset: A Game-Theoretic Approach," Economic Theory, Springer, vol. 2(2), pages 155-90, April.
- Houba, Harold & Sneek, Koos & Vardy, Felix, 2000. "Can negotiations prevent fish wars?," Journal of Economic Dynamics and Control, Elsevier, vol. 24(8), pages 1265-1280, July.
- Gaudet, G. & Moreaux, M. & Salant, S.W., 1997.
"Private Storage of Common Property,"
97-08, Michigan - Center for Research on Economic & Social Theory.
- H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124.
- Serguey Braguinsky & Roger Myerson, 2007. "Capital and growth with oligarchic property rights," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(4), pages 676-704, October.
- Colin Rowat and Jayasri Dutta, 2004.
"The commons with capital markets,"
05-01, Department of Economics, University of Birmingham.
- Gerhard Sorger, 1996.
"Markov Perfect Nash Equilibria in a Class of Resource Games,"
CIRANO Working Papers
- Gerhard Sorger, 1997. "Markov-perfect Nash equilibria in a class of resource games," Economic Theory, Springer, vol. 11(1), pages 79-100.
- Williamson, John, 2000. "What Should the World Bank Think about the Washington Consensus?," World Bank Research Observer, World Bank Group, vol. 15(2), pages 251-64, August.
- Fudenberg, Drew & Tirole, Jean, 1983. "Capital as a commitment: Strategic investment to deter mobility," Journal of Economic Theory, Elsevier, vol. 31(2), pages 227-250, December.
- Hongbin Cai & Daniel Treisman, 2005. "Does Competition for Capital Discipline Governments? Decentralization, Globalization, and Public Policy," American Economic Review, American Economic Association, vol. 95(3), pages 817-830, June.
- Homans, Frances R. & Wilen, James E., 2005. "Markets and rent dissipation in regulated open access fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 381-404, March.
- Stephen Morris & Hyun Song Shin, 2000.
"Global Games: Theory and Applications,"
Cowles Foundation Discussion Papers
1275, Cowles Foundation for Research in Economics, Yale University.
- Stephen Morris & Hyun Song Shin, 2000. "Global Games: Theory and Applications," Cowles Foundation Discussion Papers 1275R, Cowles Foundation for Research in Economics, Yale University, revised Aug 2001.
- Stephen Morris & Hyun S Shin, 2001. "Global Games: Theory and Applications," Levine's Working Paper Archive 122247000000001080, David K. Levine.
- Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-31, December.
- Ngo Van Long & Gerhard Sorger, 2004.
"Insecure Property Rights and Growth: The Roles of Appropriation Costs, Wealth Effects, and Heterogeneity,"
CESifo Working Paper Series
1253, CESifo Group Munich.
- Ngo Long & Gerhard Sorger, 2006. "Insecure property rights and growth: the role of appropriation costs, wealth effects, and heterogeneity," Economic Theory, Springer, vol. 28(3), pages 513-529, 08.
- Vives, Xavier, 2004. "Complementarities and Games: New Developments," CEPR Discussion Papers 4742, C.E.P.R. Discussion Papers.
- M. Ayhan Kose & Kenneth Rogoff & Eswar Prasad & Shang-Jin Wei, 2003. "Effects of Financial Globalization on Developing Countries; Some Empirical Evidence," IMF Occasional Papers 220, International Monetary Fund.
- Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
When requesting a correction, please mention this item's handle: RePEc:ecm:nasm04:145. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.