A note on the paper ‘On dynamical multi-team Cournot game in exploitation of a renewable resource’

Gian Italo Bischi, Michael Kopel and Ferenc Szidarovszky

Chaos, Solitons & Fractals, 2014, vol. 62-63, 34-35

Abstract: In a recent paper (Asker, 2007) [1] a dynamic Cournot oligopoly game is proposed and it is claimed that this model represents competition among firms that exploit a common access natural resource. According to the author’s claim, the feature that relates the model with renewable natural resource harvesting is given by the presence of a particular cost function where the total cost of each fisherman is proportional to the square of the own quantity of harvesting and inversely proportional to the total harvesting quantity. In contrast, the usual function used in the literature on the exploitation of natural resources (such as fisheries) is inversely proportional to the available resource stock, and not to the total harvesting. This, in some sense, assumes exactly the opposite (as the available resource is inversely proportional to the total harvesting). So, we believe that the paper (Asker, 2007) [1] contains an error which is probably due to a misunderstanding or a misreading and misinterpretation of the (well-established) literature on bioeconomic modelling, but nevertheless misleading to researchers interested in bioeconomic modelling. The aim of this short note is to explain the mistake and to summarize the correct derivation and interpretation of the cost function. Our goal is to avoid the propagation of a subtle (but nevertheless misleading) error.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chsofr:v:62-63:y:2014:i::p:34-35

DOI: 10.1016/j.chaos.2014.04.002

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