Becker, Nir, and K. William Easter. 1990. "Independent Versus Unified Management for the Great Lakes Basin." Presented at Designing Sustainability on the Commons, the first annual conference of the International Association for the Study of Common Property (IASCP), Duke University, Durham, NC, September 27-30, 1990.

Abstract

"The five Great Lakes can be classified as a common property resource. This is a consequence of the lack of a well-defined system of property rights governing, water use in the lakes. Decisions by interested parties are interconnected, since withdrawing water from one point affects the water levels in the entire system. This, in turn, adversely affects hydropower production and commercial navigation. Contributing to the complexity of the problem are the eight U.S. states, two Canadian provinces and the two federal governments. Game theory will be implemented to describe this situation. There will be several games constructed to describe different market structures. Of particular interest is the number of players that participate in the game, as well as the expectations which they hold. Open-loop (where players commit themselves to future actions) and closed-loop (where players do not commit themselves to future actions) will be compared to the ten players game (eight states and two provinces), two players game (U.S. versus Canada) and one player game (a social planner's solution). It will be shown that trying to solve an open-loop game ignores part of the externalities involved, and thus can underestimate the social loss involved in these commons."