IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-03038871.html
   My bibliography  Save this paper

Policy effectiveness in spatial resource wars: A two-region model

Author

Listed:
  • Giorgio Fabbri

    (GAEL - Laboratoire d'Economie Appliquée de Grenoble - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)

  • Silvia Faggian

    (University of Ca’ Foscari [Venice, Italy])

  • Giuseppe Freni

    (PARTHENOPE - Università degli Studi di Napoli “Parthenope” = University of Naples)

Abstract

We develop a spatial resource model in continuous time in which two agents/players strategically exploit a mobile resource in a two-region setup. To counteract the overexploitation of the resource (the tragedy of commons) that occurs when players are free to choose where to fish/hunt/extract/harvest, the regulator can establish a series of spatially structured policies. We compare the equilibria in the case of a common resource with those that emerge when the regulator either creates a natural reserve, or assigns Territorial User Rights to the players. We show that, when the discount rate is close to its "critical value", i.e. when technological and preference parameters dictate a low harvesting intensity/effort, the policies are ineffective in promoting the conservation of the resource and, in addition, they lead to a lower payoff for at least one of the players. Conversely, in a context of harsher harvesting intensity, the intervention can help to safeguard the resource, preventing extinction while also improving the welfare of both players.

Suggested Citation

  • Giorgio Fabbri & Silvia Faggian & Giuseppe Freni, 2020. "Policy effectiveness in spatial resource wars: A two-region model," Post-Print halshs-03038871, HAL.
    • Handle: RePEc:hal:journl:halshs-03038871
    DOI: 10.1016/j.jedc.2019.103818
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03038871
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-03038871/document
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jedc.2019.103818?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Boucekkine, R. & Camacho, C. & Fabbri, G., 2013. "Spatial dynamics and convergence: The spatial AK model," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2719-2736.
    2. Jayasri Dutta & Colin Rowat, 2004. "The Road to Extinction: Commons with Capital Markets," GE, Growth, Math methods 0412001, University Library of Munich, Germany.
    3. Costello, Christopher & Quérou, Nicolas & Tomini, Agnes, 2015. "Partial enclosure of the commons," Journal of Public Economics, Elsevier, vol. 121(C), pages 69-78.
    4. de Frutos, Javier & Martín-Herrán, Guiomar, 2019. "Spatial effects and strategic behavior in a multiregional transboundary pollution dynamic game," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 182-207.
    5. 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.
    6. Colin Rowat & Jayasri Dutta, 2007. "The Commons with Capital Markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(2), pages 225-254, May.
    7. Christopher Costello & Bruno Nkuiya & Nicolas Quérou, 2019. "Spatial Renewable Resource Extraction under Possible Regime Shift," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(2), pages 507-527.
    8. Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-1231, December.
    9. 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.
    10. Strulik, Holger, 2012. "Poverty, voracity, and growth," Journal of Development Economics, Elsevier, vol. 97(2), pages 396-403.
    11. Tapan Mitra & Gerhard Sorger, 2014. "Extinction in common property resource models: an analytically tractable example," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(1), pages 41-57, September.
    12. Smith, Martin D. & Sanchirico, James N. & Wilen, James E., 2009. "The economics of spatial-dynamic processes: Applications to renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 104-121, January.
    13. Tapan Mitra & Gerhard Sorger, 2015. "Noncooperative Resource Exploitation by Patient Players," Dynamic Games and Applications, Springer, vol. 5(3), pages 361-377, September.
    14. W.A. Brock & A. Xepapadeas & A.N. Yannacopoulos, 2014. "Optimal Control in Space and Time and the Management of Environmental Resources," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 33-68, October.
    15. Partha Dasgupta & Tapan Mitra & Gerhard Sorger, 2019. "Harvesting the Commons," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(3), pages 613-636, March.
    16. Jayasri Dutta & Colin Rowat, 2004. "The Road to Extinction: Commons with Capital Markets," Discussion Papers 04-11, Department of Economics, University of Birmingham, revised Jan 2007.
    17. Giuseppe Freni & Fausto Gozzi & Neri Salvadori, 2006. "Existence of optimal strategies in linear multisector models," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 25-48, September.
    18. Kaffine Daniel T & Costello Christopher, 2011. "Unitization of Spatially Connected Renewable Resources," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-31, March.
    19. Strulik, Holger, 2012. "The voracity effect revisited," Mathematical Social Sciences, Elsevier, vol. 64(3), pages 272-276.
    20. Bhat, Mahadev G. & Huffaker, Ray G., 2007. "Management of a transboundary wildlife population: A self-enforcing cooperative agreement with renegotiation and variable transfer payments," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 54-67, January.
    21. Janmaat, Johannus A., 2005. "Sharing clams: tragedy of an incomplete commons," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 26-51, January.
    22. Behringer, Stefan & Upmann, Thorsten, 2014. "Optimal harvesting of a spatial renewable resource," Journal of Economic Dynamics and Control, Elsevier, vol. 42(C), pages 105-120.
    23. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
    24. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    25. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, September.
    26. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring.
    27. Sanchirico, James N. & Wilen, James E., 1999. "Bioeconomics of Spatial Exploitation in a Patchy Environment," Journal of Environmental Economics and Management, Elsevier, vol. 37(2), pages 129-150, March.
    28. Xepapadeas, Anastasios, 2010. "The spatial dimension in environmental and resource economics," Environment and Development Economics, Cambridge University Press, vol. 15(6), pages 747-758, December.
    29. Christopher Costello & Nicolas Querou & Agnès Tomini, 2015. "Partial enclosure of the commons," Post-Print hal-01457323, HAL.
    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. Giorgio Fabbri & Silvia Faggian & Giuseppe Freni, 2022. "On competition for spatially distributed resources in networks: an extended version," Working Papers 2022:03, Department of Economics, University of Venice "Ca' Foscari".
    2. Fabbri, Giorgio & Faggian, Silvia & Freni, Giuseppe, 2024. "On competition for spatially distributed resources in networks," Theoretical Economics, Econometric Society, vol. 19(2), May.

    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. Fabbri, G. & Faggian, S. & Freni, G., 2018. "Spatial resource wars: A two region example," Working Papers 2018-04, Grenoble Applied Economics Laboratory (GAEL).
    2. Fabbri, Giorgio & Faggian, Silvia & Freni, Giuseppe, 2024. "On competition for spatially distributed resources in networks," Theoretical Economics, Econometric Society, vol. 19(2), May.
    3. Giorgio Fabbri & Silvia Faggian & Giuseppe Freni, 2022. "On competition for spatially distributed resources in networks: an extended version," Working Papers 2022:03, Department of Economics, University of Venice "Ca' Foscari".
    4. Colin Rowat & Jayasri Dutta, 2004. "The road to extinction: commons with capital markets," Econometric Society 2004 North American Summer Meetings 145, Econometric Society.
    5. Jayasri Dutta & Colin Rowat, 2004. "The Road to Extinction: Commons with Capital Markets," GE, Growth, Math methods 0412001, University Library of Munich, Germany.
    6. Christopher Costello & Daniel Kaffine, 2018. "Natural Resource Federalism: Preferences Versus Connectivity for Patchy Resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 99-126, September.
    7. Gabriel S. Sampson & James N. Sanchirico, 2019. "Exploitation of a Mobile Resource with Costly Cooperation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1135-1163, August.
    8. William Brock & Anastasios Xepapadeas, 2020. "Spatial Environmental and Resource Economics," DEOS Working Papers 2002, Athens University of Economics and Business.
    9. Ricardo Josa-Fombellida & Juan Rincón-Zapatero, 2015. "Euler–Lagrange equations of stochastic differential games: application to a game of a productive asset," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(1), pages 61-108, May.
    10. Colin Rowat & Jayasri Dutta, 2007. "The Commons with Capital Markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(2), pages 225-254, May.
    11. Zaruhi Hakobyan & Christos Koulovatianos, 2021. "Symmetric Markovian Games of Commons with Potentially Sustainable Endogenous Growth," Dynamic Games and Applications, Springer, vol. 11(1), pages 54-83, March.
    12. Eric Innocenti & Corinne Idda & Dominique Prunetti & Pierre-Régis Gonsolin, 2022. "Agent-based modelling of a small-scale fishery in Corsica," Post-Print hal-03886619, HAL.
    13. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    14. Koichi Futagami & Yuta Nakabo, 2021. "Capital accumulation game with quasi-geometric discounting and consumption externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 251-281, February.
    15. 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, March.
    16. W. A. Brock & A. Xepapadeas, 2015. "Modeling Coupled Climate, Ecosystems, and Economic Systems," Working Papers 2015.66, Fondazione Eni Enrico Mattei.
    17. Yohei Tenryu, 2017. "The role of the private sector under insecure property rights," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 285-311, September.
    18. K. Hori & A. Shibata, 2010. "Dynamic Game Model of Endogenous Growth with Consumption Externalities," Journal of Optimization Theory and Applications, Springer, vol. 145(1), pages 93-107, April.
    19. Van Long, Ngo & McWhinnie, Stephanie F., 2012. "The tragedy of the commons in a fishery when relative performance matters," Ecological Economics, Elsevier, vol. 81(C), pages 140-154.
    20. Boucekkine, Raouf & Fabbri, Giorgio & Federico, Salvatore & Gozzi, Fausto, 2022. "A dynamic theory of spatial externalities," Games and Economic Behavior, Elsevier, vol. 132(C), pages 133-165.

    More about this item

    Keywords

    Environmental protection policies; Markov perfect equilibrium; Spatial harvesting problems; Differential games;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:hal:journl:halshs-03038871. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.