Renewable resource exploitation; stochastic non-cooperative dynamic games; the commons
Abstract :
[en] We construct a game of noncooperative common-resource exploitation which delivers analytical solutions for its symmetric Markov-perfect Nash equilibrium. We examine how introducing uncertainty to the natural law of resource reproduction affects strategic exploitation. We show that the commons problem is always present in our example and we identify cases in which increases in risk amplify or mitigate the commons problem. For a specific class of games which imply Markov-perfect strategies that are linear in the resource stock (our example belongs to this class), we provide general results on how payoff-function features affect the responsiveness of exploitation strategies to changes in riskiness. These broader characterizations of games which imply linear strategies (appearing in an Online Appendix) can be useful in future work, given the technical difficulties that may arise by the possible nonlinearity of Markov-perfect strategies in more general settings.
Disciplines :
UNKNOWN KEY #A01
Identifiers :
UNILU:UL-ARTICLE-2013-083
Author, co-author :
Koulovatianos, Christos ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Antoniadou, Elena; University of Cyprus
Mirman, Leonard J.; University of Virginia
Language :
English
Title :
Strategic Exploitation of a Common-Property Resource under Uncertainty