Publication Type
Journal Article
Version
publishedVersion
Publication Date
1-2013
Abstract
We study the effect of environmental risk on the extraction of a common resource. Using a dynamic and non-cooperative game in which an environmental event impacts the renewability and the quality of the resource, we show that the anticipation of such an event has an ambiguous effect on extraction and the tragedy of the commons. A risk of a reduction in the renewability induces the agents to extract less today while a risk of a deterioration in the quality has the opposite effect. Moreover, when environmental risk induces conservation, the tragedy of the commons is worsened. (C) 2012 Elsevier B.V. All rights reserved.
Keywords
Conservation, Dynamic games, Environmental risk, Renewable resources, Tragedy of the commons
Discipline
Cultural Resource Management and Policy Analysis | Environmental Policy
Research Areas
Applied Microeconomics
Publication
Journal of Economic Dynamics and Control
Volume
37
Issue
1
First Page
125
Last Page
136
ISSN
0165-1889
Identifier
10.1016/j.jedc.2012.06.010
Publisher
Elsevier: 24 months
Citation
FESSELMEYER, Eric and SANTUGINI, Marc.
Strategic exploitation of a common resource under environmental risk. (2013). Journal of Economic Dynamics and Control. 37, (1), 125-136.
Available at: https://ink.library.smu.edu.sg/cis_research_all/13
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
http://doi.org/10.1016/j.jedc.2012.06.010