Abstract This paper addresses normative exploitation of common renewable resources with changes in technology and technical, allocative, and scale efficiency that exacerbate the commons problem and externality. Their impact depends on the rate and nature of change, investment, and state of property rights. An augmented fundamental equation of renewable resources with a modified marginal stock effect and a new marginal technology effect account for changes in disembodied and embodied technology and technical efficiency. Neglecting these changes generates misleading policy advice and dynamic inefficiency with overaccumulation of physical and natural capital and sizable foregone rents. An empirical application illustrates.

This paper presents a methodology for predicting the effect of quota-type regulatory constraints on capacity utilization for a multiproduct profit-maximizing firm. The approach builds on recent advances in the use of virtual prices to model the effects of rationing. This allows the effects of regulatory constraints to be examined ex ante. The methodology is illustrated through a case stud y of the imposition of output quotas in an open-access marine fishing industry on the Pacific Coast of the United States. The results sugg est that, for certain species, output quotas can cause strong disinvestm ent incentives. Copyright 1993 by MIT Press.