Decentralized regulation of a common property renewable resource industry with irreversible investment (Q1069420)

The effectiveness of output controls for rationalizing a common property renewable resource has been called into question by the theoretical work of \textit{J. R. Gould} [Economica, Nov., 383-402 (1972)]. A proper examination of this question requires an intertemporal analysis, one that takes into account the asymmetries between persistent factors of production (''immalleable capital'') and factors that are instantaneously consumed (''labor'' or ''harvest effort''). We present here a nonlinear intertemporal model of a renewable resource industry, under conditions of irreversible capital investment, and undertake to analyze its dynamics, both at open access and under centralized optimal management. We then examine the theoretical possibility of decentralized regulation by Pigouvian taxes, and reconsider the proposition of Gould.