Income sharing for common pool resources with uncertain productivity

Claudia Kelsall (), Martin Quaas and Nicolas Querou
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Claudia Kelsall: iDiv - German Centre for Integrative Biodiversity Research, Universität Leipzig = Leipzig University, Bren School of Environmental Science & Management - UC Santa Barbara - UCSB - University of California [Santa Barbara] - UC - University of California

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Abstract: We address the interconnected issues of externalities in the use of a natural common-pool resource system and adverse effects of environmental uncertainty on risk-averse resource users. We set up a simple, analytical model, and derive conditions such that insurance by means of an income sharing mechanism mitigates externalities, and hence achieves a socially optimal outcome. For this to materialize, we show that the sharing rule must be sufficiently sensitive to individual contributions, and specifically show that a simple, proportional sharing rule can provide incentives for both efficient contributions to the income pool and efficient use of the resource system.

Keywords: Cooperation; Diffusion Externalities; Risk Aversion; Informal Insurance; Resource Economics (search for similar items in EconPapers)
Date: 2026
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-05695104v1
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Published in American Journal of Agricultural Economics, In press

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Working Paper: Income sharing for common pool resources with uncertain productivity (2025)
Working Paper: Income sharing for common pool resources with uncertain productivity (2025)
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