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Non-parametric tests of the tragedy of the commons

Author: H Spencer Banzhaf; Yaqin Liu; Martin Daniel Smith; Frank Asche; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2019.
Series: Working paper series (National Bureau of Economic Research), no. 26398.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Extending recent results in the industrial organization literature (Carvajal et al. 2013), we derive non-parametric tests of behavior consistent with the tragedy of the commons model. Our approach derives testable implications of such behavior under any arbitrarily concave, differentiable production function of total inputs and when individual extractors of the resource have any arbitrary convex, differentiable cost  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: H Spencer Banzhaf; Yaqin Liu; Martin Daniel Smith; Frank Asche; National Bureau of Economic Research,
OCLC Number: 1125164943
Notes: "October 2019"
Description: 1 online resource (42 pages).
Series Title: Working paper series (National Bureau of Economic Research), no. 26398.
Responsibility: H. Spencer Banzhaf, Yaqin Liu, Martin Smith, Frank Asche.

Abstract:

Extending recent results in the industrial organization literature (Carvajal et al. 2013), we derive non-parametric tests of behavior consistent with the tragedy of the commons model. Our approach derives testable implications of such behavior under any arbitrarily concave, differentiable production function of total inputs and when individual extractors of the resource have any arbitrary convex, differentiable cost of supplying inputs. We extend the tests to account for behavioral errors in observed data and derive statistical tests based on "how far off" the marginal costs are from those that are consistent with the model. We also extend the tests to allow for sampling error and/or measurement error. Applying our approach to panel data of Norwegian fishers, we find evidence rejecting the tragedy of the commons model. Significantly, we find that rejection rates of the model increase after property rights reforms moved the fishery away from the tragedy of the commons.

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