Work

Exploiting common resources with capital-intensive technologies: the role of external forces

Year: 2008

Type: article

Abstract: ABSTRACT This paper focuses on the interactions between local communities having at least some degree of informal claims over natural resources and firms interested in commercially exploiting such resources, explicitly allowing for interventions by third parties interested in community welfare and environmental outcomes. Integrating conflict and bargaining theories, we develop a bargaining model with endogenous inside and outside options, in which the feasibility and outcomes of a potential bargaining game depend on the unraveling of a conflict stage and vice versa. The model implies that, contrary to the conventional bargaining model, distribution and efficiency cease to be separable. We show that certain third-party interventions in the bargaining process may have unexpected and counterproductive effects.

Source: Environment and Development Economics

DOI: 10.1017/s1355770x08004725

Authors: STEFANIE ENGEL, RAMÓN LÓPEZ

Institutions: ETH Zurich, Institute for Environmental Decisions, University of Maryland, College Park

Language: English

Topic: Natural Resources and Economic Development

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,550