Edited by Jon C. Lovett and David G. Ockwell
Chapter 10: Exploring Game Theory as a Tool for Mapping Strategic Interactions in Common Pool Resource Scenarios
Vanessa Pérez-Cirera Introduction The objective of this chapter is to introduce game theory as an analytical tool for understanding and mapping strategic interactions amongst individuals and institutions in the management of common pool resources. The chapter on the economics of common property resources explores the relation between poverty and property rights in natural resource management and emphasizes the role of transaction costs in the governance structure of common property systems and how these costs shape the outcome of these systems (Adhikari, Chapter 5, this volume). The chapter on the economic valuation of the different forms of land-use in Tanzania emphasizes the importance of identifying and incorporating non-marketed/non-priced values of environmental goods and services and how such valuations can be undertaken so that optimal levels of land-use are identified (Kirby, Chapter 11, this volume). A question that remains open is if and how these optimal solutions can be reached. This section intends to contribute towards this broad question by introducing game theory as a useful analytical tool that helps us understand how decisionmaking processes are made in the management of common pool resources. The review explains how strategic decision-making can be mapped in a game-theoretic fashion so that variables that are key for arriving at socially optimal solutions can be identified. The first section of the chapter gives an introduction to game theory as a method for the construction of game-theoretic models, introducing the reader to game-theoretic language and representation forms. The second section will review the most frequently used...
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