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The Tragedy of the Anti-Commons in the Long Run in a Common-Resource Economy

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Abstract

We examine the tragedy of the anti-commons in the long run that is defined as the total output being insufficient from the welfare viewpoint. We develop a common-resource model with a vertical structure: an upstream owners’ market and a downstream users’ market. We compare two situations: a long-run market and a second-best scenario. We find the following: (i) the number of users is insufficient (excessive) when the demand parameter is large (small); and (ii) the tragedy of the anti-commons in the long-run occurs (does not occur) when the demand parameter is large (small).

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Authors and Affiliations

  1. Ritsumeikan University, Japan

    Takao Ohkawa & Makoto Okamura

  2. Kwansei-Gakuin University, Japan

    Tetsuya Shinkai

  3. Hiroshima University, Japan

    Makoto Okamura

Authors
  1. Takao Ohkawa
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  2. Tetsuya Shinkai
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  3. Makoto Okamura
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Additional information

This paper was presented in the Hitotsubashi workshop conducted by the International Trade and Industrial Organization (August 2010). An earlier version of this paper was presented at the annual meeting of the Japanese Economic Association held in Chuo University (September 2005). We express our gratitude to Kazuhiko Kato for his insightful comments in the Hitotsubashi workshop. We also thank Kou Ishi-i, Minoru Kunisaki, Toshihiro Matsumura, Masuyuki Nishijima, Hiroshi Ohta, Kiyoshi Otani, and Tsuyoshi Toshimitsu for their helpful comments and suggestions. We are grateful to Kenzo Abe (special editor for this issue) and two anonymous referees for their comments and suggestions. Needless to say, all remaining errors in this paper are our own. This work was supported by Grant-in-Aids for Scientific Research (nos. 20530256 and 23530303).

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Ohkawa, T., Shinkai, T. & Okamura, M. The Tragedy of the Anti-Commons in the Long Run in a Common-Resource Economy. JER 63, 171–184 (2012). https://doi.org/10.1111/j.1468-5876.2012.00571.x

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