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

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.
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https://halshs.archives-ouvertes.fr/halshs-03038871
Contributor : Giorgio Fabbri <>
Submitted on : Saturday, December 26, 2020 - 11:21:33 AM
Last modification on : Friday, January 8, 2021 - 8:27:24 AM

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Giorgio Fabbri, Silvia Faggian, Giuseppe Freni. Policy effectiveness in spatial resource wars: A two-region model. Journal of Economic Dynamics and Control, Elsevier, 2020, 111 (February), pp.103818. ⟨10.1016/j.jedc.2019.103818⟩. ⟨halshs-03038871⟩

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