Summary
This paper adapts the common property theory of fisheries economics to the analysis of perfectly competitive markets. It demonstrates that the open access characteristics of markets lead to dissipation of available ‘market rents’ through the costs of excess capacity. The conclusion is that an increase in net economic benefits may be generated by restricting the number (capacity) of units operating in perfectly competitive markets.
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Additional information
Professor of Economics, Simon Fraser University. The author gratefully acknowledges research support from the Social Sciences and Humanities Reserch Council of Canada. He recognizes helpful discussions with his colleagues Pao Cheng, Arthur DeVany and Zane Spindler, without implicating them in the analysis or conclusions of this paper. Useful referee comments are also acknowledged.
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Copes, P. The market as an open access commons: A neglected aspect of excess capacity. De Economist 132, 49–60 (1984). https://doi.org/10.1007/BF02384069
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DOI: https://doi.org/10.1007/BF02384069