THE QUEUING THEORETIC APPROACH TO GROUNDWATER MANAGEMENT

In this paper I propose and develop a new framework for modeling groundwater management issues. Specifically, I apply the methods of queuing theoryfor the first time, to the best of my knowledgeto model a groundwater management problem from a long-run perspective. I characterize two simple management regimes as two different kinds of queues and then show how to pose a manager's decision problem as an optimization problem using queuing theoretic techniques. I solve for certain fundamental quantities, such as the expected system size, and then discuss the economic meaning and relevance of the queuing concepts being used. I close by discussing possible extensions to my basic models. Published in Ecological Modelling 85 (2-3, 1996):219-27.groundwater, management, stochastic, queuing, theory, Resource /Energy Economics and Policy,

THE IMPACT OF INFORMATION ON LAND DEVELOPMENT: A DYNAMIC AND STOCHASTIC ANALYSIS

In a two-period model, economists such as K.J. Arrow, A.C. Fisher, and C. Henry, have shown that when development is both indivisible and irreversible, a developer who ignores the possibility of obtaining new information about the outcome of such development will invariably underestimate the benefits of preservation and hence favor development. In this note, I extend the AFH analysis in two directions. I model the land development problem in a dynamic framework, explicitly specifying an information production function. In such a setting, I then ask and answer the question concerning when development should take place. Forthcoming in Journal of Environmental Managementdevelopment, dynamic, information, uncertainty, Land Economics/Use, D82, Q20,

CONSISTENCY AND OPTIMALITY IN A DYNAMIC GAME OF POLLUTION CONTROL I: COMPETITION

I model the interaction between a regulator and polluting firms as a Stackelberg differential game in which the regulator leads. The firms create pollution, which results in a stock externality. I analyze the intertemporal effects of alternate pollution control measures in a competitive industry. The principal issue here concerns the dynamic inconsistency of the optimal solution. Inter alia, I compare the steady state levels of pollution under optimal and under time consistent policies. Forthcoming in Environmental and Resource Economicsenvironmental, regulation, tax, dynamic, game, Environmental Economics and Policy, Q25, H32, D62,

ON SOME ASPECTS OF THE MANAGEMENT OF A STOCHASTICALLY DEVELOPING FOREST

In this paper I focus on some important biological aspects of the forest management problem. I model a stochastically developing forest as a multidimensional, continuous-time Markov chain. Next, I pose three questions concerning the long-run characteristics of a stationary forest, the stochastic process followed by dying species, and the age of an arbitrary species in the forest. I then (a) characterize a stationary forest probabilistically, (b) describe the stochastic process governing the demise of species in this forest, and (c) provide a method for determining the age of an arbitrary species in the forest. Finally, I discuss the forest management implications of the issues raised in this paper. Note: Published in Ecological Modelling 89(1-3, 1996):67-72.forest, management, continuous-time Markov chain, Resource /Energy Economics and Policy,

ENDOGENIZING THE RESERVATION VALUE IN MODELS OF LAND DEVELOPMENT OVER TIME AND UNDER UNCERTAINTY

The notion of a reservation value is a key feature of most contemporary dynamic and stochastic models of land development. It is clear that the magnitude of the reservation value has a fundamental bearing on the decision to develop or preserve land. This notwithstanding, many papers that analyze land development in a dynamic and stochastic setting treat a landowners reservation value as an exogenous variable. Therefore, the purpose of this paper is to endogenize the reservation value in the context of a model of land development over time and under uncertainty. Our analysis shows that the optimal reservation value is the solution to a specific maximization problem. In addition, we also show that there exist theoretical circumstances in which the optimal reservation value is unique.Land Economics/Use,

AN AGENDA FOR THE STUDY OF LAND USE, WILDERNESS DESIGNATION, AND RESOURCE REGULATION IN THE AMERICAN WEST

Atemporal and intertemporal use of public lands, the determination of optimal levels of wilderness designation and habitat preservation, and the appropriate regulation of natural resources have all been "hot button" issues in the American West for quite some time now. In this paper, I propose and describe a research agenda which promises to yield interesting and useful new policy insights into these fractious resource issues.land use, wilderness, regulation, research, agenda, Land Economics/Use, Resource /Energy Economics and Policy, B41, Q20, Q25,

GAME MODELS OF ENVIRONMENTAL POLICY IN AN OPEN ECONOMY

In this paper we study some aspects of the question of international environmental regulation from a game theoretic perspective. We address two broad questions. First, we examine the circumstances under which the pursuit of unilateral environmental policy by a country in a Stackelberg game will make that country worse off. Second, we study the effects of environmental regulation by means of alternate price control instruments in a Stackelberg game where there is transboundary pollution. We find that there are plausible theoretical circumstances in which the pursuit of unilateral environmental policy is not a good idea. Further, we show that in choosing between alternate pollution control instruments, national governments typically face a tradeoff between instruments which correct more distortions but are costly to implement and instruments which correct fewer distortions but are less costly to implement. In particular, we obtain a dominance result for a tariff policy; this result favors the use of tariffs from an informational standpoint alone. Published in Annals of Regional Science 30 (2, 1996): 185-200.environmental, policy, open, economy, game, Environmental Economics and Policy, D62, F13, Q28,

DEVELOPING COUNTRIES AND ENVIRONMENTAL PROTECTION: THE EFFECT OF BUDGET BALANCE AND POLLUTION CEILING CONSTRAINTS

I analyze the problem faced by an asymmetrically informed supranational governmental authority (SNGA) with limited financial resources who wishes to design an International Environmental Agreement (IEA). The SNGA cannot contract directly with polluting firms in the various LDCs, but he must deal with such firms through their governments. I study this tripartite hierarchical interaction and focus on the properties of the optimal ex post contracts (IEAs), which can be implemented by the SNGA, in turn, in the case where governments and firms in each nation do not collude and then in the case where governments and firms do collude. I find that the monetary transfers necessary to induce optimal behavior by governments and firms are not very sensitive to the presence of collusion. However, because the optimal contracts satisfy budget balance, and because there is a ceiling on the amount of pollution reduction that an IEA can require, the level and pattern of pollution abatement are never ideal. My analysis suggests that IEAs are not inherently doomed due to a basic monitoring and enforcement problem arising from national sovereignty. However, the success of IEAs is fundamentally contingent on the funds available for environmental protection and the pollution reduction ceiling negotiated by the SNGA and the LDC government. Note: Forthcoming in Journal of Development Economicsenvironmental, agreement, LDCs, budget, ceiling, Environmental Economics and Policy, International Development, D62, D82, Q25,

A MODEL OF POTENTIALLY IMMISERIZING UNILATERAL ENVIRONMENTAL CONTROLS

Environmental Economics and Policy,

AN AGENDA FOR THE DESIGN AND STUDY OF INTERNATIONAL ENVIRONMENTAL AGREEMENTS

The combination of a general greening of international political debate, and the events of 1992 at the Rio Earth summit have led to great interest in the question of global environmental protection. While it is recognized that international environmental agreements (IEAs) are the means by which the earths fragile environment is most likely to be protected, this recognition has been recent. Hence, there is very little formal research on the design and study of IEAs. As such, in this paper, I propose and describe a research agenda for the design and study of IEAs. Very generally, I propose that we frame the IEA design question as a problem in mechanism design. We will then be able to use, inter alia, the theory of common agency and the theory of hierarchies to generate interesting new theoretical and practical insights into the workings of IEAs. Note: Forthcoming in Ecological Economicsinternational, environmental, agreement, design, game, Environmental Economics and Policy, International Relations/Trade, D73, D82, L50,