Ownership risk and the use of common-pool natural resources
Jérémy Laurent-Lucchetti and
Journal of Environmental Economics and Management, 2012, vol. 63, issue 2, 242-259
It has long been recognized that the quality of property rights greatly impacts the economic development of a country and the use of its natural resources. Since Long , the conventional wisdom has been that ownership risk induces a firm to overuse the stock of a resource. However, the empirical evidence is mixed. In particular, Bohn and Deacon  find that weak property rights have an ambiguous effect on present extraction. We provide a theoretical model supporting these mixed observations in a common-pool resource environment. We show that if ownership risk includes a risk of expropriation in which the identities of the excluded firms are unknown ex ante, then the present extraction of all firms may decrease along with a higher risk of expropriation. The elasticity of demand for the resource is key in explaining the effect of ownership risk on present extraction.
Keywords: Common-pool resource; Expropriation; Extraction behavior; Ownership risk; Property rights; Tragedy of the commons (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Ownership Risk and the Use of Common-Pool Natural Resources (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:63:y:2012:i:2:p:242-259
Access Statistics for this article
Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates
More articles in Journal of Environmental Economics and Management from Elsevier
Bibliographic data for series maintained by Haili He ().