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Chapter 4: COMMON PROPERTY RESOURCES & PUBLIC GOODS - Coggle Diagram
Chapter 4:
COMMON PROPERTY RESOURCES & PUBLIC GOODS
COMMON PROPERTY RESOURCES
Non-Excludability
Rivarly
TRAGEDY of the COMMONS
overuse/ overexploitation
MANAGEMENT APPROACHES
Government Regulation
(1)
Role of the Government
Goal
(2)
Property/ Use Rights
(3)
Community-Based Management
Side Note: Natural Monopoly
ENCLOSURE
Commons → Private Property (England 18th century)
Resource: excludable + clear property rights
Reduce Overuse
Trade-off: Efficiency vs Equity
ECONOMICS of a FISHERY
Open-Access Resource
Total Product Curve (3 Phases)
Profits fall
because of diminishing catch, not rising costs
OPEN-ACCES EQUILIBRIUM
Entry until AR = AC → zero profit
Effort > efficient level
Economically inefficient
Ecologically unsustainable
Dynamically unstable
MARGINAL ANALYSIS
MR > MC → expand
MR = MC → max total profits = efficient level
MR < MC → reduce
TIME DIMENSION
Intertemporal maximization (Oil Example)
Open access → short-term gains → depletion
Private/regulated owner vs no property rights
POLICY IMPLICATIONS
License fees (↑ MC)
Quotas based on biological limits
ITQs
Privatization / cooperative management
ENVIRONMENT as a PUBLIC GOOD
Nonexcludable + nonrival
FREEE-RIDER PROBLEM (under-provision)
Valuation → contingent valuation
Collective decision-making
Global public goods / global commons