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Spatial resource wars: A two region example

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  • Fabbri, G.
  • Faggian, S.
  • Freni, G.

Abstract

We develop a spatial resource model in continuous time in which two agents strategically exploit a mobile resource in a two-location setup. In order to contrast the overexploitation of the resource (the tragedy of commons) that occurs when the player are free to choose where to fish/hunt/extract/harvest, the regulator can establish a series of spatially structured policies. We compare the three situations in which the regulator: (a) leaves the player free to choose where to harvest; (b) establishes a natural reserve where nobody is allowed to harvest; (c) assigns to each player a specific exclusive location to hunt. We show that when preference parameters dictate a low harvesting intensity, the policies cannot mitigate the overexploitation and in addition they worsen the utilities of the players. Conversely, in a context of harsher harvesting intensity, the intervention can help to safeguard the resource, preventing the extinction and also improving the welfare of both players.

Suggested Citation

  • Fabbri, G. & Faggian, S. & Freni, G., 2018. "Spatial resource wars: A two region example," Working Papers 2018-04, Grenoble Applied Economics Laboratory (GAEL).
    • Handle: RePEc:gbl:wpaper:2018-04
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    References listed on IDEAS

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    More about this item

    Keywords

    SPATIAL HARVESTING PROBLEMS; MARKOV PERFECT EQUILIBRIUM; ENVIRONMENTAL PROTECTION POLICIES; DIFFERENTIAL GAMES;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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