A dynamic common-property resource problem with potential regime shifts
This paper provides a general framework with which a dynamic problem with potential regime shifts can be analyzed in a strategic environment as well as from social planner’s perspective. A typical situation described by such a game is the joint exploitation of a common-property resource such as lakes, forests, marine fish populations, and at a larger scale the global climate system. By applying the framework to a simple dynamic common-property resource problem, we show that when the risk is endogenous, potential of regime shifts can facilitate precautionary management of common-property resources even in a strategic environment. It is also shown that there exists a resource-depletion trap in which a regime shift, once it happens, triggers a reversal of resource accumulation dynamics, possibly leading to a collapse of resource base.
|Date of creation:||Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501|
Web page: http://www.econ.kyoto-u.ac.jp/projectcenter/
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.:
- Tsur, Yacov & Zemel, Amos, 1996. "Accounting for global warming risks: Resource management under event uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1289-1305.
- De Zeeuw, A. & Polasky, S. & Wagener, F.O.O., 2010.
"Optimal Management with Potential Regime Shifts,"
CeNDEF Working Papers
10-10, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Stephen Polasky & Aart de Zeeuw & Florian Wagener, 2010. "Optimal Management with Potential Regime Shifts," CESifo Working Paper Series 3237, CESifo Group Munich.
- Stephen Polasky & Aart de Zeeuw & Florian Wagener, 2010. "Optimal Management with Potential Regime Shifts," Tinbergen Institute Discussion Papers 10-111/1, Tinbergen Institute.
- Guo, Xin & Miao, Jianjun & Morellec, Erwan, 2005.
"Irreversible investment with regime shifts,"
Journal of Economic Theory,
Elsevier, vol. 122(1), pages 37-59, May.
- 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.
- Gerhard Sorger, 2005. "A dynamic common property resource problem with amenity value and extraction costs," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(1), pages 3-19.
- Cropper, M. L., 1976. "Regulating activities with catastrophic environmental effects," Journal of Environmental Economics and Management, Elsevier, vol. 3(1), pages 1-15, June.
- Cass, David & Shell, Karl, 1983. "Do Sunspots Matter?," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 193-227, April.
- Clarke, Harry R. & Reed, William J., 1994. "Consumption/pollution tradeoffs in an environment vulnerable to pollution-related catastrophic collapse," Journal of Economic Dynamics and Control, Elsevier, vol. 18(5), pages 991-1010, September.
- Antoniadou, Elena & Koulovatianos, Christos & Mirman, Leonard J., 2013.
"Strategic exploitation of a common-property resource under uncertainty,"
Journal of Environmental Economics and Management,
Elsevier, vol. 65(1), pages 28-39.
- Christos Koulovatianos & Elena Antoniadou & Leonard J.Mirman, 2007. "Strategic Exploitation of a Common-Property Resource under Uncertainty," Vienna Economics Papers 0703, University of Vienna, Department of Economics.
- 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.
When requesting a correction, please mention this item's handle: RePEc:kue:dpaper:e-12-012. 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: (Graduate School of Economics Project Center)
If references are entirely missing, you can add them using this form.