IDEAS home Printed from https://ideas.repec.org/p/cdl/ucsdec/qt1qp1g9ts.html
   My bibliography  Save this paper

Exogenous Productivity Shocks and Capital Investment in Common-pool Resources

Author

Listed:
  • Fissel, Benjamin E
  • Glibert, Ben

Abstract

We model exogenous technology shocks in common-pool industries using a compound Poisson process for total factor productivity. Rapid di�usion of exogenous innovations is typical in the commons, but technology is rarely modeled this way. Technology shocks lower the equilibrium resource stock while causing capital buildup based on transitory pro�ts with myopic expectations. The steady state changes from a stable node to a shifting focus with boom and bust cycles, even if only technology is uncertain. A �sheries application is developed, but the results apply to many settings with discontinuous changes in value and open access with costly exit.

Suggested Citation

  • Fissel, Benjamin E & Glibert, Ben, 2010. "Exogenous Productivity Shocks and Capital Investment in Common-pool Resources," University of California at San Diego, Economics Working Paper Series qt1qp1g9ts, Department of Economics, UC San Diego.
    • Handle: RePEc:cdl:ucsdec:qt1qp1g9ts
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/1qp1g9ts.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ken Sennewald & Klaus Wälde, 2006. "“Itô's Lemma” and the Bellman Equation for Poisson Processes: An Applied View," Journal of Economics, Springer, vol. 89(1), pages 1-36, October.
    2. Berck, Peter & Perloff, Jeffrey M, 1984. "An Open-Access Fishery with Rational Expectations," Econometrica, Econometric Society, vol. 52(2), pages 489-506, March.
    3. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-293, June.
    4. Daniel R. Siegel, 1985. "Estimating Potential Social Losses from Market Failure: Oil Exploration in Alberta," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 537-552, Winter.
    5. Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
    6. Dale Squires, 1992. "Productivity Measurement in Common Property Resource Industries: An Application to the Pacific Coast Trawl Fishery," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 221-236, Summer.
    7. Hannesson, Rognvaldur, 2007. "Growth accounting in a fishery," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 364-376, May.
    8. Homans, Frances R. & Wilen, James E., 1997. "A Model of Regulated Open Access Resource Use," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 1-21, January.
    9. Kerry Smith, V., 1972. "The implications of common property resources for technical change," European Economic Review, Elsevier, vol. 3(4), pages 469-479, December.
    10. Kenneth Hendricks & Dan Kovenock, 1989. "Asymmetric Information, Information Externalities, and Efficiency: The Case of Oil Exploration," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 164-182, Summer.
    11. Baltagi, Badi H & Griffin, James M, 1988. "A General Index of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 20-41, February.
    12. Clark, Colin W & Clarke, Frank H & Munro, Gordon R, 1979. "The Optimal Exploitation of Renewable Resource Stocks: Problems of Irreversible Investment," Econometrica, Econometric Society, vol. 47(1), pages 25-47, January.
    13. Pankaj Tandon, 1983. "Rivalry and the Excessive Allocation of Resources to Research," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 152-165, Spring.
    14. Dale Squires & Niels Vestergaard, 2013. "Technical Change and The Commons," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1769-1787, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fissel, Benjamin E. & Gilbert, Ben & LaRiviere, Jacob, 2013. "Technology adoption and diffusion with uncertainty in a commons," Economics Letters, Elsevier, vol. 120(2), pages 297-301.
    2. Ingrid van Putten & Emmanuelle Quillérou & Olivier Guyader, 2012. "How constrained? Entry into the French Atlantic fishery through second-hand vessel purchase," Post-Print hal-00815455, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sturla Furunes Kvamsdal, 2019. "Indexing of Technical Change in Aggregated Data," Computational Economics, Springer;Society for Computational Economics, vol. 53(3), pages 901-920, March.
    2. Torres, Marcelo de O. & Felthoven, Ronald G., 2014. "Productivity growth and product choice in catch share fisheries: The case of Alaska pollock," Marine Policy, Elsevier, vol. 50(PA), pages 280-289.
    3. Walden, John & Fissel, Ben & Squires, Dale & Vestergaard, Niels, 2015. "Productivity change in commercial fisheries: An introduction to the special issue," Marine Policy, Elsevier, vol. 62(C), pages 289-293.
    4. Squires, Dale & Vestergaard, Niels, 2015. "Productivity growth, catchability, stock assessments, and optimum renewable resource use," Marine Policy, Elsevier, vol. 62(C), pages 309-317.
    5. Håkan Eggert & Ragnar Tveterås, 2013. "Productivity development in Icelandic, Norwegian and Swedish fisheries," Applied Economics, Taylor & Francis Journals, vol. 45(6), pages 709-720, February.
    6. Kvamsdal, Sturla F., 2012. "Technological Change in Renewable Resource Industries: An Alternative Estimation Approach," Discussion Papers 2012/14, Norwegian School of Economics, Department of Business and Management Science.
    7. Ben White, 2000. "A Review of the Economics of Biological Natural Resources," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(3), pages 419-462, September.
    8. Da Rocha Alvarez, Jose Maria & Prellezo, Raul & Sempere, Jaume & Taboada-Antelo, Luis, 2016. "Fleet dynamics and overcapitalization under rational expectations," MPRA Paper 79578, University Library of Munich, Germany.
    9. Stephen Kasperski, 2015. "Optimal Multi-species Harvesting in Ecologically and Economically Interdependent Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(4), pages 517-557, August.
    10. Squires, Dale & Vestergaard, Niels, 2018. "Rethinking the commons problem: Technical change, knowledge spillovers, and social learning," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 1-25.
    11. Squires, Dale & Vestergaard, Niels, 2013. "Technical change in fisheries," Marine Policy, Elsevier, vol. 42(C), pages 286-292.
    12. Martin F. Quaas & Max T. Stoeven & Bernd Klauer & Thomas Petersen & Johannes Schiller, 2018. "Windows of Opportunity for Sustainable Fisheries Management: The Case of Eastern Baltic Cod," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 323-341, June.
    13. Singh, Rajesh & Weninger, Quinn & Doyle, Matthew, 2006. "Fisheries management with stock growth uncertainty and costly capital adjustment," Journal of Environmental Economics and Management, Elsevier, vol. 52(2), pages 582-599, September.
    14. Clark, Colin W. & Munro, Gordon R. & Sumaila, Ussif Rashid, 2005. "Subsidies, buybacks, and sustainable fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 47-58, July.
    15. Oh, Donghyun & Heshmati, Almas & Lööf, Hans, 2014. "Total factor productivity of Korean manufacturing industries: Comparison of competing models with firm-level data," Japan and the World Economy, Elsevier, vol. 30(C), pages 25-36.
    16. Berck, Peter & Costello, Christopher, 2000. "Overharvesting the traditional fishery with a captured regulator," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt94t2p8qq, Department of Agricultural & Resource Economics, UC Berkeley.
    17. Harhoff, Dietmar, 1991. "R&D incentives and spillovers in a two-industry model," ZEW Discussion Papers 91-06, ZEW - Leibniz Centre for European Economic Research.
    18. Martinet, Vincent & Thebaud, Olivier & Doyen, Luc, 2007. "Defining viable recovery paths toward sustainable fisheries," Ecological Economics, Elsevier, vol. 64(2), pages 411-422, December.
    19. Anderson, James L. & Asche, Frank & Garlock, Taryn, 2018. "Globalization and commoditization: The transformation of the seafood market," Journal of Commodity Markets, Elsevier, vol. 12(C), pages 2-8.
    20. Eric Nævdal, 2022. "Productivity and Management of Renewable Resources: Why More Efficient Fishing Fleets Should Fish Less," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(3), pages 409-424, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:ucsdec:qt1qp1g9ts. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/deucsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.