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Information Structure and the Tragedy of the Commons in Resource Extraction

Author

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  • Rabah Amir

    (University of Copenhagen, Institute of Economics)

  • Niels Nannerup

    (University of Southern Denmark, Department of Economics)

Abstract

This paper considers the well-known Levhari-Mirman model of resource extraction, and investigates the effects of the information structure of the dynamic game - open-loop, Markovian or history-dependent - on the equilibrium consumption path and the overall utility of the agents. The open-loop regime yields a Pareto-optimal outcome. The Markovian regime leads to the most pronounced version of the tragedy of the commons. History-dependent behavior yields an outcome set that is intermediate between the other two cases.

Suggested Citation

  • Rabah Amir & Niels Nannerup, 2000. "Information Structure and the Tragedy of the Commons in Resource Extraction," Discussion Papers 00-09, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0009
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2000/0009.pdf/
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    Cited by:

    1. AMIR, Rabah, 2001. "Stochastic games in economics and related fields: an overview," LIDAM Discussion Papers CORE 2001060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Alejandra Fonseca-Morales & Onésimo Hernández-Lerma, 2018. "Potential Differential Games," Dynamic Games and Applications, Springer, vol. 8(2), pages 254-279, June.
    3. Agah R. Turan, 2019. "Intentional time inconsistency," Theory and Decision, Springer, vol. 86(1), pages 41-64, February.
    4. David González-Sánchez & Onésimo Hernández-Lerma, 2014. "Dynamic Potential Games: The Discrete-Time Stochastic Case," Dynamic Games and Applications, Springer, vol. 4(3), pages 309-328, September.

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    More about this item

    Keywords

    Dynamic resource games; Open-loop; Closed-loop and trigger strategies; Pareto optimality; Regulation;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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