My Neighbor’s Cattle: Strategic Behavior in a Spatial-dynamic Model with an Invasive Weed

We consider optimal behavior in a class of spatial-dynamic economic problems related to a negative externality with stock effects, via the development of a dynamic, non-cooperative game. Feedback Nash equilibrium response functions are parameterized based on an invasive weed found on western US cattle ranches. Simulations illustrate trade-offs between increasing costs of management efforts, the invasives’ impact on productivity and temporal growth impacts, when another agent’s effort and infestation levels are considered. Symmetric and asymmetric cases as well as the socially optimal and second-best alternatives are considered. Optimal strategies are often case specific, exemplifying the complexity of management.This research is funded in part by the USDA PREISM competitive grant program (Grant 43- 3AEM-5-80065). The views expressed are not necessarily those of the USDA