On the impact of trade in a common property renewable resource oligopoly

Hassan Benchekroun, Amrita Ray Chaudhuri and Dina Tasneem

Journal of Environmental Economics and Management, 2020, vol. 101, issue C

Abstract: We consider a common-pool renewable resource differential game. We show that within this dynamic oligopolistic framework, Free Trade may lead to a lower discounted sum of consumer surplus and of social welfare than Autarky. Trade restrictions may be supported based on both resource conservation and efficiency motives. A priori, this finding is not straightforward; a move from Autarky to Free Trade causes industry output to first increase and then decrease over time. While producers are shown to be always worse off under Free Trade than under Autarky, consumers are better off in the short run and worse off in the long run. We determine the conditions under which the long-run effects outweigh the short-run effects of trade, leading to a decrease in the discounted sum of not only consumer surplus, but also social welfare.

Keywords: Renewable resource; Differential games; International trade; Market efficiency; Productive asset oligopoly (search for similar items in EconPapers)
JEL-codes: C73 D43 F10 Q20 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: On the Impact of Trade in a Common Property Renewable Resource Oligopoly (2019)
Working Paper: On the Impact of Trade in a Common Property Renewable Resource Oligopoly (2019)
Working Paper: On the Impact of Trade in a Common Property Renewable Resource Oligopoly (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:101:y:2020:i:c:s0095069620300279

DOI: 10.1016/j.jeem.2020.102304

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