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Negotiations over the Provision of Multiple Ecosystem Services

Author

Listed:
  • Alain-Désiré Nimubona

    (University of Waterloo
    CIRANO)

  • Ahmet Ozkardas

    (University of Waterloo)

  • Jean-Christophe Pereau

    (Université de Bordeaux)

Abstract

This paper analyzes the provision of multiple ecosystem services (ES) by several providers (e.g. farmers) and the negotiation process over their payments by many beneficiaries, who are each interested in one specific type of ES. We determine the main factors that influence the beneficiaries and providers’ preferences to negotiate individually or collectively. These factors are the number of providers, the marginal product of ecosystem acreage, and the cost/benefit ratio of ecosystem conservation through the payment for ecosystem services (PES). Using Nash-in-Nash bargaining, we show that four Nash equilibria can emerge. In equilibrium, beneficiaries and providers can both negotiate individually or collectively while facing opponents acting individually or collectively. We provide a welfare characterization of all the four equilibria that arise from the bargaining game. We show that the two equilibria in which beneficiaries negotiate collectively can implement the first-best.

Suggested Citation

  • Alain-Désiré Nimubona & Ahmet Ozkardas & Jean-Christophe Pereau, 2023. "Negotiations over the Provision of Multiple Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(2), pages 475-506, February.
    • Handle: RePEc:kap:enreec:v:84:y:2023:i:2:d:10.1007_s10640-022-00730-w
    DOI: 10.1007/s10640-022-00730-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Payments for Ecosystem Services (PES); Multiple Purchasers; Collective PES; Bilateral Bargaining; Nash-in-Nash;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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