Negotiations over the Provision of Multiple Ecosystem Services

Alain-Désiré Nimubona (), Ahmet Ozkardas and Jean-Christophe Pereau
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Alain-Désiré Nimubona: University of Waterloo
Ahmet Ozkardas: University of Waterloo
Jean-Christophe Pereau: Université de Bordeaux

Environmental & Resource Economics, 2023, vol. 84, issue 2, No 5, 475-506

Abstract: Abstract This paper analyzes the provision of multiple ecosystem services (ES) by several providers (e.g. farmers) and the negotiation process over their payments by many beneficiaries, who are each interested in one specific type of ES. We determine the main factors that influence the beneficiaries and providers’ preferences to negotiate individually or collectively. These factors are the number of providers, the marginal product of ecosystem acreage, and the cost/benefit ratio of ecosystem conservation through the payment for ecosystem services (PES). Using Nash-in-Nash bargaining, we show that four Nash equilibria can emerge. In equilibrium, beneficiaries and providers can both negotiate individually or collectively while facing opponents acting individually or collectively. We provide a welfare characterization of all the four equilibria that arise from the bargaining game. We show that the two equilibria in which beneficiaries negotiate collectively can implement the first-best.

Keywords: Payments for Ecosystem Services (PES); Multiple Purchasers; Collective PES; Bilateral Bargaining; Nash-in-Nash (search for similar items in EconPapers)
JEL-codes: Q15 Q24 Q26 Q28 Q57 Q58 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10640-022-00730-w

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