Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
959367 | Journal of Environmental Economics and Management | 2007 | 14 Pages |
Abstract
This paper characterizes a dynamic contract that allows renegotiation and variable transfer payments (VTP) between owners of two independently-harvested, ecologically-dependent mammal populations. The decision environment is modeled as a two-person differential game. We develop a recursive-efficiency criterion that forms the basis for determining the size of the VTP, which makes the bargaining contract renegotiation-proof and self-enforcing. We further show that the VTP is just as Pareto-efficient as a lump sum or fixed annual transfer payment. A nuisance wildlife species management forms a basis for numerical illustration.
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Authors
Mahadev G. Bhat, Ray G. Huffaker,