Potential games and competition in the supply of natural resources

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This dissertation discusses the Cournot competition and competitions in the exploitation of common pool resources and its extension to the tragedy of the commons. I address these models by using potential games and inquire how these models reflect the real

This dissertation discusses the Cournot competition and competitions in the exploitation of common pool resources and its extension to the tragedy of the commons. I address these models by using potential games and inquire how these models reflect the real competitions for provisions of environmental resources. The Cournot models are dependent upon how many firms there are so that the resultant Cournot-Nash equilibrium is dependent upon the number of firms in oligopoly. But many studies do not take into account how the resultant Cournot-Nash equilibrium is sensitive to the change of the number of firms. Potential games can find out the outcome when the number of firms changes in addition to providing the "traditional" Cournot-Nash equilibrium when the number of firms is fixed. Hence, I use potential games to fill the gaps that exist in the studies of competitions in oligopoly and common pool resources and extend our knowledge in these topics. In specific, one of the rational conclusions from the Cournot model is that a firm's best policy is to split into separate firms. In real life, we usually witness the other way around; i.e., several firms attempt to merge and enjoy the monopoly profit by restricting the amount of output and raising the price. I aim to solve this conundrum by using potential games. I also clarify, within the Cournot competition model, how regulatory intervention in the management of environmental pollution externalities affects the equilibrium number of polluters. In addition, the tragedy of the commons is the term widely used to describe the overexploitation of open-access common-pool resources. Open-access encourages potential resource users to continue to enter the resource up to the point where rents are exhausted. The resulting level of resource use is higher than is socially optimal, and in extreme cases can lead to the collapse of the resource and the communities that may depend on it. In this paper I use the concept of potential games to evaluate the relation between the cost of resource use and the equilibrium number of resource users in open access regimes. I find that costs of access and costs of production are sufficient to determine the equilibrium number of resource users, and that there is in fact a continuum between Cournot competition and the tragedy of the commons. I note that the various common pool resource management regimes identified in the empirical literature are associated with particular cost structures, and hence that this may be the mechanism that determines the number of resource users accessing the resource.
Date Created
2017
Agent

Multi-scale analysis of the opportunities and threats of large-scale land acquisitions (LaSLA) to the sustainable development of Sub-Saharan Africa (with a focus on Tanzania)

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Large-scale land acquisition (LaSLA), also called "land grabbing" refers to the buying or leasing of large tracts of land, especially in Sub-Saharan Africa (SSA) by foreign investors to produce food and biofuel to send back home. Since 2007, LaSLA has

Large-scale land acquisition (LaSLA), also called "land grabbing" refers to the buying or leasing of large tracts of land, especially in Sub-Saharan Africa (SSA) by foreign investors to produce food and biofuel to send back home. Since 2007, LaSLA has become an important development issue due to the opportunities and threats for SSA countries. LaSLA has the potential to create local jobs, transfer technology, build infrastructure, and modernize SSA's agriculture. Nonetheless, it can also aggravate food insecurity, perpetuate corruption, degrade ecosystems, cause conflicts, and displace local communities. What drives LaSLA, what are its impacts on local people, and under what circumstances can we consider it as just and ethical?

To examine what drives LaSLA, I used country level data from 2005 to 2013 on economic conditions, natural resources, business practices, and governance to estimate LaSLA models. I find that LaSLA increases with increasing government effectiveness, land prices, and the ease of doing business, and decreases with stronger regulatory regimes. To assess LaSLA's impacts on local people, I conducted a comparative case study in Tanzania. I compare changes in peoples' livelihood between treatment villages (those experiencing LaSLA) and control villages (those without LaSLA projects). The results show that under current practices, the risks of LaSLA outweigh the benefits to local livelihoods, yet there are potential benefits if LaSLA is implemented correctly.

To philosophically examine whether LaSLA can be considered just and ethical, I apply John Rawls' theory of justice. The analysis indicates that from both procedural and distributive justice perspective, LaSLA currently fails to satisfy Rawlsian principles of justice. From these analyses, I conclude that if implemented correctly, LaSLA can produce a win-win outcome for both investors and host countries. I suggest that strong governance, rigorous environmental and social impact assessment, and inclusion of local people at all levels of LaSLA decision making are critical for sustainable and equitable outcomes.
Date Created
2017
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The Impact of Forest Thinning on the Reliability of Water Supply in Central Arizona

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Economic growth in Central Arizona, as in other semiarid systems characterized by low and variable rainfall, has historically depended on the effectiveness of strategies to manage water supply risks. Traditionally, the management of supply risks includes three elements: hard infrastructures,

Economic growth in Central Arizona, as in other semiarid systems characterized by low and variable rainfall, has historically depended on the effectiveness of strategies to manage water supply risks. Traditionally, the management of supply risks includes three elements: hard infrastructures, landscape management within the watershed, and a supporting set of institutions of which water markets are frequently the most important. In this paper we model the interactions between these elements. A forest restoration initiative in Central Arizona (the Four Forest Restoration Initiative, or 4FRI) will result in thinning of ponderosa pine forests in the upper watershed, with potential implications for both sedimentation rates and water delivery to reservoirs. Specifically, we model the net effect of ponderosa pine forest thinning across the Salt and Verde River watersheds on the reliability and cost of water supply to the Phoenix metropolitan area. We conclude that the sediment impacts of forest thinning (up to 50% of canopy cover) are unlikely to compromise the reliability of the reservoir system while thinning has the potential to increase annual water supply by 8%. This represents an estimated net present value of surface water storage of $104 million, considering both water consumption and hydropower generation.

Date Created
2015-04-02
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Potential emergence of dengue in the Phoenix Metropolitan Area: a micro-climatic and demographic analysis

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The spread of dengue worldwide currently places half of the world’s population at risk. In the absence of a dengue vaccine, control of the disease requires control of the mosquito species that transmit the virus. The most important of these

The spread of dengue worldwide currently places half of the world’s population at risk. In the absence of a dengue vaccine, control of the disease requires control of the mosquito species that transmit the virus. The most important of these is. Advances in research detailing the responsiveness of Aedes aegypti to small changes in climate enable the production of more sophisticated remote sensing and surveillance techniques for monitoring these populations. Close monitoring of global dengue activity and outbreaks likewise enables a greater specificity when determining to which human populations the virus is most likely to spread. There have been no locally acquired cases in Arizona to date, but the high abundance of Aedes aegypti in the Phoenix Metropolitan area raises concern within the Arizona Department of Health Services over the potential transmission of dengue in the city. This study develops a model that combines mosquito abundance, micro-climatic and demographic information to delineate regions in Phoenix that are most support transmission of dengue. The first chapter focuses on the impact that daytime high and low temperatures have on Aedes aegypti’s ability to become infectious with dengue. It argues that NDVI (normal difference vegetative index) imaging of the Phoenix area can be used to plot areas where mosquitoes are most likely to become competent vectors. The second chapter focuses on the areas in the city where mosquitoes are most likely to be exposed to the virus. Based on proximity to Phoenix and the high volume of traffic across the Arizona-Mexico border, I treat the Mexican state of Sonora as the source of infection. I combine these two analyses, micro-climatic and demographic, to produce maps of Phoenix that show the locations with the highest likelihood of transmission overall.
Date Created
2016
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Biodiversity, dispersal, and risk: species spread in ecological and social-ecological systems

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The closer integration of the world economy has yielded many positive benefits including the worldwide diffusion of innovative technologies and efficiency gains following the widening of international markets. However, closer integration also has negative consequences. Specifically, I focus

The closer integration of the world economy has yielded many positive benefits including the worldwide diffusion of innovative technologies and efficiency gains following the widening of international markets. However, closer integration also has negative consequences. Specifically, I focus on the ecology and economics of the spread of species and pathogens. I approach the problem using theoretical and applied models in ecology and economics. First, I use a multi-species theoretical network model to evaluate the ability of dispersal to maintain system-level biodiversity and productivity. I then extend this analysis to consider the effects of dispersal in a coupled social-ecological system where people derive benefits from species. Finally, I estimate an empirical model of the foot and mouth disease risks of trade. By combining outbreak and trade data I estimate the disease risks associated with the international trade in live animals while controlling for the biosecurity measures in place in importing countries and the presence of wild reservoirs. I find that the risks associated with the spread and dispersal of species may be positive or negative, but that this relationship depends on the ecological and economic components of the system and the interactions between them.
Date Created
2016
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Advancing the causal theory of natural selection

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The Modern Synthesis embodies a theory of natural selection where selection is to be fundamentally understood in terms of measures of fitness and the covariance of reproductive success and trait or character variables. Whether made explicit or left implicit, the

The Modern Synthesis embodies a theory of natural selection where selection is to be fundamentally understood in terms of measures of fitness and the covariance of reproductive success and trait or character variables. Whether made explicit or left implicit, the notion that selection requires that some trait variable cause reproductive success has been deemphasized in our modern understanding of exactly what selection amounts to. The dissertation seeks to advance a theory of natural selection that is fundamentally causal. By focusing on the causal nature of natural selection (rather than on fitness or statistical formulae), certain conceptual and methodological problems are seen in a new, clarifying light and avenues toward new, interesting solutions to those problems are illustrated. First, the dissertation offers an update to explicitly causal theories of when exactly a trait counts as an adaptation upon fixation in a population and draws out theoretical and practical implications for evolutionary biology. Second, I examine a case of a novel character that evolves by niche construction and argue that it evolves by selection for it and consider implications for understanding adaptations and drift. The third contribution of the dissertation is an argument for the importance of defining group selection causally and an argument against model pluralism in the levels of selection debate. Fourth, the dissertation makes a methodological contribution. I offer the first steps toward an explicitly causal methodology for inferring the causes of selection—something often required in addition to inferring the causes of reproductive success. The concluding chapter summarizes the work and discusses potential paths for future work.
Date Created
2016
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Merging Economics and Epidemiology to Improve the Prediction and Management of Infectious Disease

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Mathematical epidemiology, one of the oldest and richest areas in mathematical biology, has significantly enhanced our understanding of how pathogens emerge, evolve, and spread. Classical epidemiological models, the standard for predicting and managing the spread of infectious disease, assume that

Mathematical epidemiology, one of the oldest and richest areas in mathematical biology, has significantly enhanced our understanding of how pathogens emerge, evolve, and spread. Classical epidemiological models, the standard for predicting and managing the spread of infectious disease, assume that contacts between susceptible and infectious individuals depend on their relative frequency in the population. The behavioral factors that underpin contact rates are not generally addressed. There is, however, an emerging a class of models that addresses the feedbacks between infectious disease dynamics and the behavioral decisions driving host contact. Referred to as “economic epidemiology” or “epidemiological economics,” the approach explores the determinants of decisions about the number and type of contacts made by individuals, using insights and methods from economics. We show how the approach has the potential both to improve predictions of the course of infectious disease, and to support development of novel approaches to infectious disease management.
Date Created
2015-12-01
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Sustainable Development in an N-Rich/N-Poor World

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Sustainable development requires that per capita inclusive wealth—produced, human, and natural capital—does not decline over time. We investigate the impact of changes in nitrogen on inclusive wealth. There are two sides to the nitrogen problem. Excess use of nitrogen in

Sustainable development requires that per capita inclusive wealth—produced, human, and natural capital—does not decline over time. We investigate the impact of changes in nitrogen on inclusive wealth. There are two sides to the nitrogen problem. Excess use of nitrogen in some places gives rise to N-pollution, which can cause environmental damage. Insufficient replacement of nitrogen in other places gives rise to N-depletion, or loss of nutrient stocks. Neither is explicitly accounted for in current wealth measures, but both affect wealth. We calculate an index of net N-replacement, and investigate its relationship to wealth. In countries with low levels of relative N-loss, we find that the uncompensated loss of soil nitrogen in poorer countries is associated with declining rates of growth of inclusive per capita wealth. What is less intuitive is that increasing fertilizer application in both rich and poor countries can increase per capita inclusive wealth.

Date Created
2014-11-01
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Bioeconomic models and sustainable use of marine resources: three case studies

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This dissertation consists of three substantive chapters. The first substantive chapter investigates the premature harvesting problem in fisheries. Traditionally, yield-per-recruit analysis has been used to both assess and address the premature harvesting of fish stocks. However, the fact that fish

This dissertation consists of three substantive chapters. The first substantive chapter investigates the premature harvesting problem in fisheries. Traditionally, yield-per-recruit analysis has been used to both assess and address the premature harvesting of fish stocks. However, the fact that fish size often affects the unit price suggests that this approach may be inadequate. In this chapter, I first synthesize the conventional yield-per-recruit analysis, and then extend this conventional approach by incorporating a size-price function for a revenue-per-recruit analysis. An optimal control approach is then used to derive a general bioeconomic solution for the optimal harvesting of a short-lived single cohort. This approach prevents economically premature harvesting and provides an "optimal economic yield". By comparing the yield- and revenue-per-recruit management strategies with the bioeconomic management strategy, I am able to test the economic efficiency of the conventional yield-per-recruit approach. This is illustrated with a numerical study. It shows that a bioeconomic strategy can significantly improve economic welfare compared with the yield-per-recruit strategy, particularly in the face of high natural mortality. Nevertheless, I find that harvesting on a revenue-per-recruit basis improves management policy and can generate a rent that is close to that from bioeconomic analysis, in particular when the natural mortality is relatively low.

The second substantive chapter explores the conservation potential of a whale permit market under bounded economic uncertainty. Pro- and anti-whaling stakeholders are concerned about a recently proposed, "cap and trade" system for managing the global harvest of whales. Supporters argue that such an approach represents a novel solution to the current gridlock in international whale management. In addition to ethical objections, opponents worry that uncertainty about demand for whale-based products and the environmental benefits of conservation may make it difficult to predict the outcome of a whale share market. In this study, I use population and economic data for minke whales to examine the potential ecological consequences of the establishment of a whale permit market in Norway under bounded but significant economic uncertainty. A bioeconomic model is developed to evaluate the influence of economic uncertainties associated with pro- and anti- whaling demands on long-run steady state whale population size, harvest, and potential allocation. The results indicate that these economic uncertainties, in particular on the conservation demand side, play an important role in determining the steady state ecological outcome of a whale share market. A key finding is that while a whale share market has the potential to yield a wide range of allocations between conservation and whaling interests - outcomes in which conservationists effectively "buy out" the whaling industry seem most likely.

The third substantive chapter examines the sea lice externality between farmed fisheries and wild fisheries. A central issue in the debate over the effect of fish farming on the wild fisheries is the nature of sea lice population dynamics and the wild juvenile mortality rate induced by sea lice infection. This study develops a bioeconomic model that integrates sea lice population dynamics, fish population dynamics, aquaculture and wild capture salmon fisheries in an optimal control framework. It provides a tool to investigate sea lice control policy from the standpoint both of private aquaculture producers and wild fishery managers by considering the sea lice infection externality between farmed and wild fisheries. Numerical results suggest that the state trajectory paths may be quite different under different management regimes, but approach the same steady state. Although the difference in economic benefits is not significant in the particular case considered due to the low value of the wild fishery, I investigate the possibility of levying a tax on aquaculture production for correcting the sea lice externality generated by fish farms.
Date Created
2014
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A social-ecological evaluation of conservation markets for wildlife

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Many wildlife species that are essential to human livelihoods are targeted with the aim of extracting short-term benefits. Overexploitation, resulting from failed common-pool resource governance, has endangered the sustainability of large animal species, in particular. Rights-based approaches to wildlife conservation

Many wildlife species that are essential to human livelihoods are targeted with the aim of extracting short-term benefits. Overexploitation, resulting from failed common-pool resource governance, has endangered the sustainability of large animal species, in particular. Rights-based approaches to wildlife conservation offer a possible path forward. In a wildlife market, property rights, or shares of an animal population, are allocated to resource users with interests in either harvest or preservation. Here, I apply the Social-Ecological Systems (SES) framework (Ostrom, 2009) to identify the conditions under which the ecological, social, and economic outcomes of a conservation market are improved compared to the status quo. I first consider three case studies (Bighorn sheep, white rhino, and Atlantic Bluefin tuna) all of which employ different market mechanisms. Based on the SES framework and these case studies, I then evaluate whether markets are a feasible management option for other socially and ecologically significant species, such as whales (and similar highly migratory species), and whether market instruments are capable of accommodating non-consumptive environmental values in natural resource decision making. My results suggest that spatial and temporal distribution, ethical and cultural relevance, and institutional histories compatible with commodification of wildlife are key SES subsystem variables. Successful conservation markets for cross-boundary marine species, such as whales, sea turtles, and sharks, will require intergovernmental agreements.
Date Created
2014
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