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Bargaining over natural resources: Governments between environmental organizations and extraction firms

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  • Schopf, Mark
  • Voss, Achim

Abstract

We consider the resource-extraction policy of a government that is lobbied by an environmental organization and an extraction firm from foreign countries. To analyze this situation, we propose a sequential Nash bargaining solution: The government bargains with both lobbies simultaneously. Should this trilateral negotiation fail, it chooses one lobby for a bilateral negotiation. The disagreement point then is to bargain with the other lobby. Finally, should this second bilateral negotiation break down, the government chooses the welfare-maximizing policy.

Suggested Citation

  • Schopf, Mark & Voss, Achim, 2019. "Bargaining over natural resources: Governments between environmental organizations and extraction firms," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 208-240.
    • Handle: RePEc:eee:jeeman:v:97:y:2019:i:c:p:208-240
    DOI: 10.1016/j.jeem.2017.12.002
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    References listed on IDEAS

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    1. Voss, Achim & Schopf, Mark, 2021. "Lobbying over exhaustible-resource extraction," European Economic Review, Elsevier, vol. 135(C).
    2. Harstad, Bård, 2016. "The market for conservation and other hostages," Journal of Economic Theory, Elsevier, vol. 166(C), pages 124-151.
    3. Thomas Eichner & Rüdiger Pethig, 2015. "Lobbying for and Against Subsidizing Green Energy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 925-947, December.
    4. Sorger, Gerhard, 2006. "Recursive Nash bargaining over a productive asset," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2637-2659, December.
    5. Okada, Akira, 2010. "The Nash bargaining solution in general n-person cooperative games," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2356-2379, November.
    6. Achim Voss & Mark Schopf, 2014. "Lobbying over Exhaustible-Resource Extraction," Working Papers CIE 80, Paderborn University, CIE Center for International Economics.
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    Cited by:

    1. Dulong, Angelika von & Hagen, Achim & Mendelevitch, Roman & Eisenack, Klaus, 2023. "Buy coal and gas? Interfuel carbon leakage on deposit markets with market power," Energy Economics, Elsevier, vol. 117(C).
    2. Guthrie, Graeme, 2021. "A dynamic model of managerial entrenchment and the positive incentives it creates," Journal of Economic Dynamics and Control, Elsevier, vol. 123(C).
    3. Voss, Achim & Schopf, Mark, 2021. "Lobbying over exhaustible-resource extraction," European Economic Review, Elsevier, vol. 135(C).
    4. Li, Zhen & Wu, Baijun & Wang, Danyang & Tang, Maogang, 2022. "Government mandatory energy-biased technological progress and enterprises' environmental performance: Evidence from a quasi-natural experiment of cleaner production standards in China," Energy Policy, Elsevier, vol. 162(C).
    5. Achim Voss & Mark Schopf, 2016. "Special Interest Politics: Contribution Schedules versus Nash Bargaining," Working Papers Dissertations 27, Paderborn University, Faculty of Business Administration and Economics.
    6. Kong, Dongmin & Ma, Guangyuan & Qin, Ni, 2022. "The political economy of firm emissions: Evidence from a quasi-natural experiment in China," European Journal of Political Economy, Elsevier, vol. 75(C).
    7. Kalk, Andrei & Sorger, Gerhard, 2023. "Climate policy under political pressure," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    8. Bård Harstad, 2020. "The Conservation Multiplier," CESifo Working Paper Series 8283, CESifo.

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    More about this item

    Keywords

    Nash bargaining; Dynamic bargaining; Lobbying; International political economy; Environmental policy; Exhaustible-resource extraction; Stock-pollution;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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