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A Dynamic Study on Ecological Disaster, Government Regulation, and Renewable Resources
Author(s) -
Nie Puyan,
Sun Peng,
Yang Bill Z.
Publication year - 2014
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/ajes.12075
Subject(s) - property rights , tragedy of the commons , renewable resource , commons , resource (disambiguation) , natural resource economics , government (linguistics) , productivity , natural resource , economics , yield (engineering) , renewable energy , resource productivity , business , market economy , microeconomics , ecology , resource allocation , economic growth , computer network , linguistics , philosophy , materials science , computer science , metallurgy , biology
This article develops a dynamic model to investigate renewable resource markets under different property rights. We find that different property rights regimes in renewable resource markets yield very different equilibria. Under private property rights, the valve point increases with the natural growth rate, productivity, number of firms, and marginal costs. Under common property rights, “the tragedy of the commons” inescapably occurs. This study suggests how to avoid ecological disaster by implementing a set of public policies.