nep-res New Economics Papers
on Resource Economics
Issue of 2006‒11‒18
three papers chosen by
Maximo Rossi
Universidad de la Republica

  1. To Commit or Not to Commit: Environmental Policy In Imperfectly Competitive Markets By Emmanuel Petrakis; Anastasios Xepapadeas
  2. Valuing Biodiversity from an Economic Perspective: AUnified Economic, Ecological and Genetic Approach By William Brock; Anastasios Xepapadeas
  3. Regulation and Evolution of Compliance in Common Pool Resources By Anastasios Xepapadeas

  1. By: Emmanuel Petrakis (Department of Economics, University of Crete, Greece); Anastasios Xepapadeas (Department of Economics, University of Crete, Greece)
    Abstract: This paper investigates the effect of the government’s ability to commit, or not, to a specific level of environmental policy instrument, or environmental innovation and welfare in imperfectly competitive markets. We that under monopoly if the government is unable to commit, and follows thus a time consistent policy, then in general emission taxes are lower, while environmental innovation, profits and welfare are higher relative to the precommitment case. The monopoly results extend to the small numbers oligopoly, but they are reserved for the last numbers oligopoly case. Thus of the sufficiently large numbers of firms, emission taxes can be lower and innovation efforts and welfare can be higher under government commitment. The two policy regimes converge, regarding emission taxes, abetment effort and welfare, when the numbers of firms tends to infinity. Our findings indicate that, contrary to most of the results obtained previously, welfare gains can be achieve by either policy regime- precommitment or time consistent-depending on the numbers of firms in the industry.
    Keywords: Emision Tax, Apatement effort, Time Consistent Policies, Precommitment, Monopoly, Oligopoly
    JEL: L12 Q25 Q28
    URL: http://d.repec.org/n?u=RePEc:crt:wpaper:0110&r=res
  2. By: William Brock (University of Wisconsin, Department of Economics, USA); Anastasios Xepapadeas (Department of Economics, University of Crete, Greece)
    Abstract: We develop a conceptual framework for valuing biodiversity from an economic perspective. We consider biodiversity important because of a number of characteristics or services that it provides or enhances. We argue for a dynamic economic welfare measure of biodiversity that complements the existing literature on benefit-cost approaches and genetic distance/phylogenic tree approaches, which to date have been more static. Using a unified model of optimal economic management of an ecosystem under ecological and genetic constraints, we identify gains realized by management policies leading to a more diverse system, using the Bellman state valuation function of the problem. We show that a more diverse system could attain a higher value even though the genetic distance of the species in the more diverse system could be almost zero. We relate this endogenous measure of the biodiversity value to ecologically/biologically oriented biodiversity metrics (species richness, Shannon or Simpson indices).
    URL: http://d.repec.org/n?u=RePEc:crt:wpaper:0301&r=res
  3. By: Anastasios Xepapadeas (Department of Economics, University of Crete, Greece)
    Abstract: The paper jointly models the evolution of compliance with regulation and the evolution of a CPR stock, by combining replicator dynamics describing compliance with harvesting rules, with resource stock dynamics. This evolutionary approach suggests that coexistence, in long run equilibrium, of both cooperative and non-cooperative rules under regulation is possible. Stock effects on profits and a certain structure of auditing probabilities could imply the emergence of a limit cycle in areas of low stock levels, as an equilibrium outcome for compliance and the biomass stock. It might be easier for the regulator to obtain full compliance under precommitment to fixed auditing probabilities.
    Keywords: Common pool resources (CPR), harvesting, regulation, replicator dynamics, compliance
    JEL: Q20 Q22 C61
    URL: http://d.repec.org/n?u=RePEc:crt:wpaper:0312&r=res

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