Abstract
We examine two key aspects of strategic behavior in an environmental conflict. First, we consider the tactics of players who differ in relative strength, given that the order in which they play is endogenous. The results suggest that the weaker player (the underdog) always has an incentive to move first, while the more powerful player (the favorite) has an incentive to wait. The optimal level of self—protection is less than with either Nash equilibrium or favorite commitment, implying reduced social costs. Second, we explore the profitability of a strategic commitment where team members determine and publicly announce their optimal sharing rule before effort decisions of all the players are made. We rationalize the existence of exclusive membership in teams. Finally, the social costs of allocating resources to a conflict become greater when the team size is less than half of the number of contenders, compared to the same conflict without strategic team formation.
A. Dixit, J. Hirshleifer, T. Perri, and T. Sterner provided helpful comments on related work. C. Kolstad, J. Braden, and seminar participants at the University of Illinois and Iowa State University also supplied useful suggestions. Detlev Homann and a reviewer added detailed comments which have improved the paper.
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© 1992 Springer-Verlag Berlin · Heidelberg
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Shogren, J.F., Baik, K.H., Crocker, T.D. (1992). Environmental Conflicts and Strategic Commitment. In: Pethig, R. (eds) Conflicts and Cooperation in Managing Environmental Resources. Microeconomic Studies. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-46765-3_5
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DOI: https://doi.org/10.1007/978-3-642-46765-3_5
Publisher Name: Springer, Berlin, Heidelberg
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