Incentives to give up resource extraction and avoid the tragedy of the commons

Juan Miguel Benito-Ostolaza () and Nuria Osés-Eraso ()
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Juan Miguel Benito-Ostolaza: Departamento de Economía-UPNA, https://www.unavarra.es/departamento-economia
Nuria Osés-Eraso: Departamento de Economía-UPNA, https://www.unavarra.es/departamento-economia
Authors registered in the RePEc Author Service: Juan Miguel Benito Ostolaza

Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra from Departamento de Economía - Universidad Pública de Navarra

Abstract: This paper develops a general model of common resource extraction where we introduce payments for environmental services to encourage resource users to give up extraction. The goal is to reach a balance between resource use and conservation. As the essence of conservation is dynamic, we use a dynamic model to study the implementation of the compensation scheme. A stable heterogeneous equilibrium can be reached where both extractors and non-extractors live together. We analyze how the success of the compensation depends on factors such as the elasticity of demand and the biological characteristics of the resource.

Keywords: common resource; overcapacity; payment for environmental ser- vices; compensation; replicator dynamics (search for similar items in EconPapers)
JEL-codes: C61 Q20 Q29 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-env
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