On the Optimal Taxation of Common-Pool Resources

26 Pages Posted: 4 Oct 2010

See all articles by Georgios Kossioris

Georgios Kossioris

University of Crete

Michael Plexousakis

University of Crete

Anastasios Xepapadeas

Athens University of Economics and Business; University of Bologna - School of Economics, Management, and Statistics

Aart de Zeeuw

Tilburg University - Department of Economics

Date Written: March 29, 2010

Abstract

Recent research developments in common-pool resource models emphasize the importance of links with ecological systems and the presence of non-linearities, thresholds and multiple steady states. In a recent paper Kossioris et al. (2008) develop a methodology for deriving feedback Nash equilibria for non-linear differential games and apply this methodology to a common-pool resource model of a lake where pollution corresponds to benefits and at the same time affects the ecosystem services. This paper studies the structure of optimal state- dependent taxes that steer the combined economic-ecological system towards the trajectory of optimal management, and provides an algorithm for calculating such taxes.

Keywords: Differential Games, non-linear Feedback Nash Equilibria, Ecosystems, Optimal State-dependent Tax

JEL Classification: Q25, C73, C61

Suggested Citation

Kossioris, Georgios and Plexousakis, Michael and Xepapadeas, Anastasios and de Zeeuw, Aart J., On the Optimal Taxation of Common-Pool Resources (March 29, 2010). FEEM Working Paper No. 101.2010, Available at SSRN: https://ssrn.com/abstract=1686967 or http://dx.doi.org/10.2139/ssrn.1686967

Georgios Kossioris

University of Crete ( email )

Rethymno, GR-74100
Greece

Michael Plexousakis

University of Crete ( email )

Rethymno, RETHIMNO GR-74100
Greece

Anastasios Xepapadeas (Contact Author)

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Aart J. De Zeeuw

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2065 (Phone)
+31-13-466-3042 (Fax)

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