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The Use of Common Property Resources: A Dynamic Model
Michele Moretto University of Padua - Department of Economics; Fondazione Eni Enrico Mattei (FEEM) Paolo Rosato University of Trieste - Department of Civil Engineering; Fondazione Eni Enrico Mattei (FEEM) January 2002 FEEM Working Paper No. 13.2002 Abstract: The government of common agricultural and forestry land is a topic that is currently enjoying a revival of interest. Many local communities have shown the ability to pursue sustainable use of natural resources thanks to their self-governed authorities. In this context the relationship between public and private interest which is established in use of the resource is a fairly controversial. The paper proposes a dynamic model to analyse the behaviour of a user of a common property resource in a "real option" framework, where the value of the right to use the resource is affected by: 1) uncertainty on the future amount of the resource; 2) entry and exit costs and 3) the number of users competitors.
Keywords: Common property resources, option value, uncertainty Working Paper SeriesDate posted: March 21, 2002 ; Last revised: March 22, 2002Suggested CitationContact Information
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