14th journées Louis-André Gérard-Varet

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Spatial concessions with limited tenure
Nicolas Querou, Agnes Tomini, Christopher Costello

Last modified: 2015-04-30

Abstract


We examine theoretically a system of spatially-connected natural resource concessions with limited tenure.  The resource migrates around the system and thus induces a spatial externality.  Concessions can be renewed, but only if their owners maintain resource stocks above a pre-defined target.  We show that this instrument improves upon the decentralized property right solution and can replicate (under general conditions) the socially optimal extraction path in every patch, in perpetuity.  The duration of tenure and the dispersal of the resource play pivotal roles in whether this instrument achieves the socially optimal outcome, and sustains cooperation of all agents.

Keywords


Concession rights; Renewable resources; Spatial externalities