Two level competitive structures in common resource development

Yury M. Korolev ; Petr V. Golubtsov

Matematičeskaâ teoriâ igr i eë priloženiâ, Tome 2 (2010) no. 4, pp. 25-51

Résumé

The paper studies effects of owner-developer interaction in resources development. The resources are supposed to be allocated between several proprietors and several companies are permitted to develop them. Perhaps the most interesting example is marine fishery. We study such game in the context of multinational management of a transboundary marine fishery. It is well known that unconstrained harvesting often leads to resource depletion. This effect is often called “tragedy of commons”. The situation becomes more complex when we take into account competition between the resource proprietors. Such interaction can be described as a game with players of two different types: proprietors and developers, called first and second level players, respectively. The first-level players establish rules (taxes on development efforts) for the second-level players, who in their turn optimize their strategies reasoning from these rules. Every developer receives a profit from resource selling and returns a part of it to the owner as a tax. The systems described here appear in management problems for energy resources, mineral resources, biological resources, water resources, etc.

Détail

Keywords: optimal resource management, common natural resources, tragedy of commons, two level games, Nash equilibrium, Stackelberg game with multiple leaders, mathematical modeling.