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On Overexploitation and Incentive Mechanisms: Congestion vs Non Exclusion



We consider the case of commons in the presence of congestion. Excluding the least efficient agents is often proposed with the argument that they are not capable of obtaining the same added value as the most efficient agents can. In this paper we show why free access to commons by the most efficient agents does not guarantee the maximization of social welfare. We also show under which conditions it is possible to maximize social welfare avoiding the exclusion of the least efficient agents. Finally, we analyze how asymmetric information distorts first-best allocation, redistributing the resource in favor of the most efficient agents, and why those with extreme types (the most and the least efficient agents) are the ones with less incentive to cooperate.


Commons; Congestion; Asymmetric Information; Adverse Selection; Environment; Natural Resources; Incentives

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