Perfect assumptions in an imperfect world: Managing timberland in an oligopoly market

Bruno Kanieski da Silva, Shaun Tanger, Mohammad Marufuzzaman and Frederick Cubbage

Forest Policy and Economics, 2022, vol. 137, issue C

Abstract: We built a game-theoretic supply model where forest landowners respond to each other's decisions using two market assumptions: (i) Perfect cartel, (ii) Cournot competition (simultaneous moves) and (iii) Stackelberg competition (sequential moves). Our findings indicate that the initial forest structure is instrumental in determining forest composition outcomes among suppliers. The solutions in the Cournot model, landowners with the same initial forest structure have uniform outcomes with increased variation in financial performance arising with different initial endowments of pulpwood and sawtimber and establishment costs. Alternatively, Stackelberg leadership has profound financial benefits to leaders even under similar initial conditions, that remain regardless of scenario. However, while terminal overall forest composition was similar regardless of scenario under Cournot outcomes, the same is not true under Stackelberg. We find that Stackelberg outcomes led to the follower being unable to harvest younger age classes over time, which resulted in accumulation of older age class stands. Our results elucidate the importance of diversification and policies that reduce landownership land concentration.

Keywords: Regulated forest; Forest management; Game theory; Market competition (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S138993412200003X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:137:y:2022:i:c:s138993412200003x

DOI: 10.1016/j.forpol.2022.102691

Access Statistics for this article

Forest Policy and Economics is currently edited by M. Krott

More articles in Forest Policy and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().