Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155243
Authors: 
lasserre, Pierre
Soubeyran, Antoine
Year of Publication: 
2001
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 80.2001
Abstract: 
This paper revisits the tragedy of the commons when agents have different capabilities in both production and encroachment activities, and can allocate their time between them. Under fairly general assumptions on production and encroachment technologies, an individual's expected income is convex with respect to his actions so that individuals specialize. Consequently, in equilibrium, the economy is divided into at most two homogeneous groups: encroachers and producers. The partition obeys a relative advantage criterion. Several equilibria may exist. The "tragedy of the commons" equilibrium without production always does; the Pareto optimal allocation of activities may not be an equilibrium. We show that minute changes in property right enforcement may lead to drastic improvements for society. We argue that, in convex games such as this paper's role choice game, bounded rationality is a natural assumption, and the concept of local Nash equilibrium is the natural analytical tool to handle it.
Subjects: 
Property rights
institutions
commons
convexity
general equilibrium
bounded rationality
JEL: 
D23
D62
D7
K00
Document Type: 
Working Paper

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