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On the Optimal Taxation of Common-Pool Resources

Author

Listed:
  • Georgios Kossioris

    (Department of Mathematics, University of Crete)

  • Michael Plexousakis

    (Department of Applied Mathematics, University of Crete)

  • Anastasios Xepapadeas

    (Athens University of Economics and Business and Beijer Fellow)

  • Aart de Zeeuw

    (TSC, Tilburg University and Beijer Fellow)

Abstract

Recent research developments in common-pool resource models emphasize the importance of links with ecological systems and the presence of non-linearities, thresholds and multiple steady states. In a recent paper Kossioris et al. (2008) develop a methodology for deriving feedback Nash equilibria for non-linear differential games and apply this methodology to a common-pool resource model of a lake where pollution corresponds to benefits and at the same time affects the ecosystem services. This paper studies the structure of optimal state- dependent taxes that steer the combined economic-ecological system towards the trajectory of optimal management, and provides an algorithm for calculating such taxes.

Suggested Citation

  • Georgios Kossioris & Michael Plexousakis & Anastasios Xepapadeas & Aart de Zeeuw, 2010. "On the Optimal Taxation of Common-Pool Resources," Working Papers 2010.101, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2010.101
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    References listed on IDEAS

    as
    1. Karl-Göran Mäler & Anastasios Xepapadeas & Aart de Zeeuw, 2003. "The Economics of Shallow Lakes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(4), pages 603-624, December.
    2. Wagener, F. O. O., 2003. "Skiba points and heteroclinic bifurcations, with applications to the shallow lake system," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1533-1561, July.
    3. Anne-Sophie Crépin & Therese Lindahl, 2009. "Grazing Games: Sharing Common Property Resources with Complex Dynamics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(1), pages 29-46, September.
    4. Kossioris, G. & Plexousakis, M. & Xepapadeas, A. & de Zeeuw, A. & Mäler, K.-G., 2008. "Feedback Nash equilibria for non-linear differential games in pollution control," Journal of Economic Dynamics and Control, Elsevier, vol. 32(4), pages 1312-1331, April.
    5. Dechert, W.D. & O'Donnell, S.I., 2006. "The stochastic lake game: A numerical solution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(9-10), pages 1569-1587.
    6. Hein, Lars, 2006. "Cost-efficient eutrophication control in a shallow lake ecosystem subject to two steady states," Ecological Economics, Elsevier, vol. 59(4), pages 429-439, October.
    7. Benchekroun, Hassan & van Long, Ngo, 1998. "Efficiency inducing taxation for polluting oligopolists," Journal of Public Economics, Elsevier, vol. 70(2), pages 325-342, November.
    8. W.A. Brock & D. Starrett, 2003. "Managing Systems with Non-convex Positive Feedback," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(4), pages 575-602, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Benchekroun, Hassan & Ray Chaudhuri, Amrita & Tasneem, Dina, 2020. "On the impact of trade in a common property renewable resource oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    2. Michele Bisceglia, 2020. "Optimal taxation in a common resource oligopoly game," Journal of Economics, Springer, vol. 129(1), pages 1-31, January.
    3. Dmitry Gromov & Thorsten Upmann, 2021. "Dynamics and Economics of Shallow Lakes: A Survey," Sustainability, MDPI, vol. 13(24), pages 1-16, December.
    4. Engelbert Dockner & Florian Wagener, 2014. "Markov perfect Nash equilibria in models with a single capital stock," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(3), pages 585-625, August.
    5. Tasneem, Dina & Engle-Warnick, Jim & Benchekroun, Hassan, 2017. "An experimental study of a common property renewable resource game in continuous time," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 91-119.
    6. Brock, W. A. & Xepapadeas, A., 2015. "Modeling Coupled Climate, Ecosystems, and Economic Systems," Climate Change and Sustainable Development 206837, Fondazione Eni Enrico Mattei (FEEM).
    7. William Brock & Anastasios Xepapadeas, 2020. "Spatial Environmental and Resource Economics," DEOS Working Papers 2002, Athens University of Economics and Business.
    8. Giannis Vardas & Anastasios Xepapadeas, 2015. "Time Scale Externalities and the Management of Renewable Resources," Working Papers 2015.27, Fondazione Eni Enrico Mattei.
    9. Wagener, F.O.O., 2013. "Economics of environmental regime shifts," CeNDEF Working Papers 13-08, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    10. Anastasios Xepapadeas, 2022. "On the optimal management of environmental stock externalities," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 119(24), pages 2202679119-, June.
    11. Ngo Van Long, 2019. "Managing, Inducing, and Preventing Regime Shifts: A Review of the Literature," CESifo Working Paper Series 7749, CESifo.
    12. McDermott Shana, 2015. "Optimal Regulation of Invasive Species Long-Range Spread: A General Equilibrium Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1731-1752, October.
    13. N. Baris Vardar & Georges Zaccour, 2020. "Exploitation of a Productive Asset in the Presence of Strategic Behavior and Pollution Externalities," Mathematics, MDPI, vol. 8(10), pages 1-28, October.

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    More about this item

    Keywords

    Differential Games; non-linear Feedback Nash Equilibria; Ecosystems; Optimal State-dependent Tax;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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