Land Use and Decentralized Government: A Strategic Approach for Playing a Short-Sighted Equilibrium

Maria Carmela Aprile, Bruno Chiarini and Elisabetta Marzano

No 7344, CESifo Working Paper Series from CESifo

Abstract: This paper presents a simple strategic model (defined as a shortsighted game) to highlight the incentives for local governments to allow the exploitation of land in areas not suitable for such exploitation due to environmental or other risks. Municipal discretionary policy inevitably produces strategic complementarities and guides individuals to use the land (to choose the most beneficial “shortsighted” Nash equilibrium). In light of these results, it seems possible to state that the definition of non-exploitable territory and the decisions concerning it should not be left to local governments.

Keywords: land exploitation; municipal policy; strategic complementarities; myopic equilibrium (search for similar items in EconPapers)
JEL-codes: C72 H31 H77 Q24 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-gth and nep-ure
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Related works:
Journal Article: Land use and decentralized government: A strategic approach for playing a short-sighted equilibrium (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7344

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