Access the full text.
Sign up today, get DeepDyve free for 14 days.
While the commons problem and the issues related to the negative externalities of harvesting have been studied extensively, there remains a need to bridge these two streams of studies to comprehensively investigate the implications of the strategic interactions among resource harvesters in the presence of such negative externalities. This paper aims to fill this gap.Design/methodology/approachThe authors study a common-pool harvest problem when the extractive activities leave behind negative externalities which affect the resource growth rate and reduce the stock beyond the extracted levels. Markov perfect noncooperative and optimal solutions are presented under different scenarios regarding considerations of negative externalities into harvest decisions.FindingsResults of the study suggest that, in the presence of such externalities, all parties must scale down their extraction in accordance with their externalities. The resource can be preserved by implementation of such harvest rule. However, failure to incorporate the externalities exacerbates the commons problem and can even lead to exhaustion of the biomass even if countries manage to cooperate and coordinate their harvest. Suggesting that if such externalities are large enough – which empirical literature suggests they are – then recognition and consideration of these externalities in the harvest decisions is as crucial as cooperation.Originality/valueThis paper provides a framework that is capable of incorporating the negative externalities of harvest activities into a bioeconomic game theoretic model and thereby providing a more real-world representation of the state of the common-pool resource management. While, the authors extend a well-known simple model, the model of this research study has the capacity to explain the widespread incidences of resource collapses. Therefore, the important policy implication is that agents should rigorously work together to understand the extent of the negative externalities of their harvests on the resources.
Journal of Economic Studies – Emerald Publishing
Published: Oct 29, 2021
Keywords: Fishery; Common-pool resources; Dynamic games; Resource extraction; The tragedy of the commons; Negative externality; C70; Q20; Q22
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.