The Instability of the Nash Equilibrium in Common-Pool Resources

Tatsuyoshi Saijo () and Yutaka Kobayashi
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Yutaka Kobayashi: Kochi University of Technology

No SDES-2014-5, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: Efficient allocations in common-pool resources cannot be accomplished when appropriators are selfish. In addition to this dilemma, using a linear approximation of best response functions at the Nash equilibrium in the common-pool resource environment, we find that the system of simultaneous difference equations is locally unstable if the number of appropriators is at least four. This result indicates that the equilibrium analysis might not capture the essence of the common-pool resource problem, but provides an answer to ``some unexplained pulsing behavior'' (Ostrom, Journal of Economic Behavior and Organization, vol. 61, no.2 [2006], p. 150) of each appropriator's labor input in common-pool resource experiments.

JEL-codes: C62 C72 C92 Q22 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2014-10, Revised 2014-10
New Economics Papers: this item is included in nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in SDE Series, October 2014, pages 1-12

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http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2014-5.pdf First version, 2014 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2014-5

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