The Tragedy of the Anti‐Commons in the Long Run in a Common‐Resource Economy

Abstract:     
We examine the tragedy of the anti‐commons in the long run that is defined as the total output being insufficient from the welfare viewpoint. We develop a common‐resource model with a vertical structure: an upstream owners' market and a downstream users' market. We compare two situations: a long‐run market and a second‐best scenario. We find the following: (i) the number of users is insufficient (excessive) when the demand parameter is large (small); and (ii) the tragedy of the anti‐commons in the long‐run occurs (does not occur) when the demand parameter is large (small).

Number of Pages in PDF File: 14

JEL Classification: D23, L13, O34, P14

Accepted Paper Series