Exploiting common resources with capital-intensive technologies: the role of external forces

Stefanie Engel and Ramon Lopez

Environment and Development Economics, 2008, vol. 13, issue 5, 565-589

Abstract: This paper focuses on the interactions between local communities having at least some degree of informal claims over natural resources and firms interested in commercially exploiting such resources, explicitly allowing for interventions by third parties interested in community welfare and environmental outcomes. Integrating conflict and bargaining theories, we develop a bargaining model with endogenous inside and outside options, in which the feasibility and outcomes of a potential bargaining game depend on the unraveling of a conflict stage and vice versa. The model implies that, contrary to the conventional bargaining model, distribution and efficiency cease to be separable. We show that certain third-party interventions in the bargaining process may have unexpected and counterproductive effects.

Date: 2008
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Working Paper: Exploiting Common Resources with Capital-Intensive Technologies: The Role of External Forces (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:endeec:v:13:y:2008:i:05:p:565-589_00

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