Externalities, Market Power, and Resource Extraction

Manjira Datta and Leonard Mirman

No 97/12, Working Papers from Arizona State University, Department of Economics

Abstract: This paper analyzes the effect of market power in a model with dynamic and biological externalities. When several countries harvest fish in international waters the evolution of fish population is affected by their joint action, thus, generating a biological and a dynamic externality. If there is trade in fish, the market-clearing prices depend on the harvesting and consumption decision made in every country. Therefore, market-clearing prices generate another type of interdependence. The planners' make their policy decision by taking account of various externalities.We find a subgame perfect Cournot-Nash equilibrium and the conditions under which it may be efficient. We also study the role of di®erent externalities in generating inefficiency.

JEL-codes: C72 D90 Q22 (search for similar items in EconPapers)
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Related works:
Journal Article: Externalities, Market Power, and Resource Extraction (1999)
Working Paper: Externalities, Market Power, and Resource Extraction
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