Inequality and Conservation on the Local Commons: A Theoretical Excercise

Found at: https://hdl.handle.net/10535/7982
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Type:	Conference Paper
Author:	Dayton-Johnson, Jeff; Bardhan, Pranab
Conference:	Property Rights, Institutions, and Management of Environmental and Natural Resources, the Fourth Toulouse Conference on Environment and Resource Economics
Location:	Toulouse, France
Conf. Date:	May 3-4
Date:	2001
URI:	https://hdl.handle.net/10535/7982
Sector:	Theory
Region:
Subject(s):	inequality game theory common pool resources--models cooperation--models conservation--models
Abstract:	"To analyse the effect of asset inequality on co-operation within a group, we consider a two-player nonco-operative model of conservation of a common-pool resource. Overexploitation by one user affects another's payoff by reducing the next-period catch. We give necessary and sufficient conditions such that conservation is a Nash equilibrium, and show that increasing inequality does not, in general, favour full conservation. However, once inequality is sufficiently great, further inequality can raise efficiency. Thus, the relationship between inequality economic efficiency is U-shaped. Finally, we analyse the implications for conservation if players have earning opportunities outside the commons."

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