The dynamic efficiency costs of common-pool resource exploitation
Abstract
We conduct the first empirical investigation of common-pool resource users' dynamic
and strategic behavior at the micro level using real-world data. Fishermen's strategies
in a fully dynamic game account for latent resource dynamics and other players' actions,
revealing the profit structure of the fishery. We compare the fishermen's actual and
socially optimal exploitation paths under a time-specific vessel allocation policy
and find a sizable dynamic externality. Individual fishermen respond to other users
by exerting effort above the optimal level early in the season. Congestion is costly
instantaneously but is beneficial in the long run because it partially offsets dynamic
inefficiencies.
Type
Journal articlePermalink
https://hdl.handle.net/10161/9293Published Version (Please cite this version)
10.1257/aer.104.12.4071Publication Info
Huang, Ling; & Smith, Martin D (2014). The dynamic efficiency costs of common-pool resource exploitation. American Economic Review, 104(12). pp. 3991-4026. 10.1257/aer.104.12.4071. Retrieved from https://hdl.handle.net/10161/9293.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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Martin D. Smith
George M. Woodwell Distinguished Professor of Environmental Economics
Smith studies the economics of the oceans, including fisheries, marine ecosystems,
seafood markets, and coastal climate adaptation. He has written on a range of policy-relevant
topics, including economics of marine reserves, seasonal closures in fisheries, ecosystem-based
management, catch shares, nutrient pollution, aquaculture, genetically modified foods,
the global seafood trade, organic agriculture, coastal property markets, and coastal
responses to climate change. He is best known for id

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