A Ricardian Model of the Tragedy of the Commons

28 Pages Posted: 6 Nov 2001

See all articles by Pierre Lasserre

Pierre Lasserre

University of Quebec at Montreal (UQAM) - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO); University of Angers - Research Group in Quantitative Saving (GREQAM)

Antoine Soubeyran

University of Angers - Research Group in Quantitative Saving (GREQAM)

Date Written: October 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.

Keywords: Property rights, institutions, commons, convexity, general equilibrium, bounded rationality

JEL Classification: D23, D62, D7, K00

Suggested Citation

Lasserre, Pierre and Soubeyran, Antoine, A Ricardian Model of the Tragedy of the Commons (October 2001). Available at SSRN: https://ssrn.com/abstract=289741 or http://dx.doi.org/10.2139/ssrn.289741

Pierre Lasserre (Contact Author)

University of Quebec at Montreal (UQAM) - Department of Economics

Center for Interuniversity Research and Analysis on Organization (CIRANO)

University of Angers - Research Group in Quantitative Saving (GREQAM)

Antoine Soubeyran

University of Angers - Research Group in Quantitative Saving (GREQAM) ( email )

Centre de la Vieille Charité
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