Biosecurity Incentives, Network Effects, and Entry of a Rapidly Spreading Pest
Protection against pest invasion is a public good. Yet the nature of private incentives to avoid entry is poorly understood. This work shows that, due to increasing returns or network effects, private actions to avoid entry are strategic complements. This means that compulsory action, at least by a subset of parties, can be an effective policy. Both heterogeneity in biosecurity costs and the effect of private actions on the extent of the invasion threat are shown to have ambiguous effects on the magnitude of welfare loss due to strategic behavior. Communicated leadership by some party is preferred to simultaneous moves, and it may be best if the party with highest biosecurity costs assumes a leadership role.
|Date of creation:||29 Mar 2012|
|Publication status:||Published in Ecological Economics, December 2008, vol. 68 no. 1-2, pp. 230-239|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
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