Preserving Nature Reserves: The Government as an Actor in an Application of Game Theory in a Case Study in the Netherlands

Abstract

"The protection of a collective good, such as a nature reserve, in the setting of a noncooperative game, requires governmental actions to promote cooperation. However, at the moment the legal use of land changes, for example from farmland into a nature reserve, the government may pop up as an actor in the acquisition of this land or to compensate the loss of market value. The government and the farmer appear as players in a game. The government may suddenly show non co-operative behaviour with intention to minimise spending of public money whereas farmers intend to maximise compensation.This splits the government as a facilitator of co-operative behaviour based on equity or as participant in a non-co-operative game directed to efficiency. We analyse this dilemma for three governmental strategies to reduce N-deposition by industrial farming near a nature reserve. The efficiency and effectiveness of these strategies to increase the nature reservation acreage are evaluated in the framework of game theory. The conclusion is that both costeffectiveness and equity may go together in a governmental strategy that is also preferred by a large part of the farmers. We end with recommendations to improve environmental policy in comparable settings."