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Limited-tenure concessions for collective goods

Author

Listed:
  • Nicolas Quérou

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

  • Agnes Tomini

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Christopher Costello

    (UC Santa Barbara - University of California [Santa Barbara] - UC - University of California)

Abstract

We analyze theoretically an institution called a "limited-tenure concession" for its ability to induce efficient public goods contribution and common-pool resource extraction. The basic idea is that by limiting the tenure over which an agent can enjoy the public good, but offering the possibility of renewal contingent on ample private provision of that good, efficient provision may be induced. We first show in a simple repeated game setting that limited-tenure concessions can incentivize socially-efficient provision of public goods. We then analyze the ability of this instrument to incentivize the first best provision for common-pool natural resources such as fish and water, thus accounting for spatial connectivity and growth dynamics of the resource. The duration of tenure and the dispersal of the resource play pivotal roles in whether this limitedtenure concession induces the socially optimal private provision. Finally, in a setting with costly monitoring, we discuss the features of a concession contract that ensure first-best behavior, but at least cost to the implementing agency.

Suggested Citation

  • Nicolas Quérou & Agnes Tomini & Christopher Costello, 2022. "Limited-tenure concessions for collective goods," Post-Print hal-03722912, HAL.
    • Handle: RePEc:hal:journl:hal-03722912
    DOI: 10.1016/j.jedc.2022.104484
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03722912v1
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    Cited by:

    1. Quaas, Martin F. & Winkler, Ralph, 2025. "A market mechanism for sustainable and efficient resource use under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 131(C).

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H00 - Public Economics - - General - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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