On the attainment of the maximum sustainable yield in the Verhulst-Lotka-Volterra model

We reformulate the Verhulst-Lotka-Volterra model of natural resource extraction under the alternative assumptions of Cournot behaviour and perfect competition, to revisit the tragedy of commons vs the possibility of sustainable harvesting. We stress the different impact of demand elasticity on the regulator’s possibility of driving industry harvest to the maximum sustainable yield in the two settings. The presence of a flat demand function offers the authority a fully effective regulatory tool in the form of the exogeneous price faced by perfectly competitive firms, to drive their collective harvest rate at the maximum sustainable yield. The same cannot happen under Cournot competition, as in this case the price is endogenous and the regulator’s policy is confined to limiting access to the common pool

Strategies of Foreign Direct Investment in the Presence of Technological Spillovers

Dawid H, Zou B. Strategies of Foreign Direct Investment in the Presence of Technological Spillovers. Working Papers in Economics and Management. Vol 12-2013. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2013.In this paper we present a differential game model of two firms with different technologies producing the same good and selling in the same world market. The firm equipped with advanced technology is deciding whether to outsource parts of its production to the home country of its competitor, where wages and the level of technology are lower. Outsourcing reduces production costs but is associated with spillovers to the foreign competitor. The degree to which the foreign competitor can absorb these spillovers depends on its absorptive effort. Using numerical methods the properties of a Markov Perfect Equilibrium of this game are characterized and the implications of the variation of different key parameters are examined

Managerial delegation in a dynamic renewable resource oligopoly

I propose a differential oligopoly game of resource extraction under (quasi-static) open-loop and nonlinear feedback strategies, where firms are managerial and two alternative types of delegation contract are considered. Under open-loop information, delegation expands the residual steady state resource stock. Conversely, under nonlinear feedback information the outcome depends on the structure of managerial incentives. If sales are used, once again delegation favours resource preservation. On the contrary, if market shares are included in the delegation contract, this combines with an underlying voracity effect in shrinking the steady state volume of the resource

On the Interplay between Resource Extraction and Polluting Emissions in Oligopoly

This paper offers an overview of the literature discussing oligopoly games in which polluti ng emissions are generated by the supply of goods requiring a natural resource as an input. An analytical summary of the main features of the interplay between pollution and resource extraction is then given using a differential game based on the Cournot oligopoly model, in which (i) the bearings on resource preservation of Pigouvian tax rate tailored on emissions are singled out and (ii) the issue of the optimal number of firms in the commons is also addressed