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Publication year
The Dynamic Efficiency Costs of Common-Pool Resource Exploitation
Resource type
Authors/contributors
- Huang, Ling (Author)
- Smith, Martin D. (Author)
Title
The Dynamic Efficiency Costs of Common-Pool Resource Exploitation
Abstract
We conduct the first empirical investigation of common-poolresource users' dynamic and strategic behavior at the micro levelusing real-world data. Fishermen's strategies in a fully dynamicgame account for latent resource dynamics and other players'actions, revealing the profit structure of the fishery. We compare thefishermen's actual and socially optimal exploitation paths undera time-specific vessel allocation policy and find a sizable dynamicexternality. Individual fishermen respond to other users by exertingeffort above the optimal level early in the season. Congestionis costly instantaneously but is beneficial in the long run because itpartially offsets dynamic inefficiencies. (JEL D24, Q21, Q22)
Publication
American Economic Review
Volume
104
Issue
12
Pages
4071-4103
Date
2014-12
Citation
Huang, L., & Smith, M. D. (2014). The Dynamic Efficiency Costs of Common-Pool Resource Exploitation. American Economic Review, 104, 4071–4103.
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