Externalities, Market Power, and Resource Extraction

Manjira Datta and Leonard Jay Mirman

Working Papers from Department of Economics, W. P. Carey School of Business, Arizona State University

Abstract: This paper analyzes the effect of market power in a model with dynamic and biological externalities. When several countries harvest fish in international waters the evolution of fish population is affected by their joint action, thus, generating a biological and a dynamic externality. If there is trade in fish, the market-clearing prices depend on the harvesting and consumption decision made in every country. Therefore, market-clearing prices generate another type of interdependence. The planners' make their policy decision by taking account of various externalities.We find a subgame perfect Cournot-Nash equilibrium and the conditions under which it may be efficient. We also study the role of different externalities in generating inefficiency.

JEL-codes: C73 D51 D90 F12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-env and nep-mic
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Related works:
Working Paper: Externalities, Market Power, and Resource Extraction
Journal Article: Externalities, Market Power, and Resource Extraction (1999)
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