Institutions for shared resources
Debrief Classwork 3, develop the institutional toolkit in Lecture 4, and apply it to a shared aquifer in Classwork 4. The week ends with the Classwork 4 discussion.
Focus
- Evidence from the Classwork 3 fishing experiment
- Property rights, public goods, and open access
- Liability, regulation, incentives, and transaction costs
Prepare
- Revisit your Classwork 3 choices and group record
- Read TL Chapter 2
- Bring one explanation for a difference across settings
Practice
- Compare catches, dock prices, and fish left
- Identify who may use, exclude, transfer, monitor, and enforce
- Design pumping and information rules for a shared aquifer
Guiding question
What did the fishing experiment reveal about incentives—and which institutions can make resource users face the consequences of their choices?
Learning targets
- Interpret differences across the five fishing settings without treating them as clean causal estimates.
- Distinguish private, common, public, and open-access resource regimes.
- Explain why open access dissipates rent and why public goods tend to be underprovided.
- Add individual marginal benefits vertically to value a public good.
- Design a resource institution while accounting for monitoring, transaction costs, and fairness.
Lecture slides
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This week’s materials
TL refers to Tietenberg and Lewis, Natural Resource Economics: The Essentials, 2nd edition. Chapter numbers on this page follow that edition, not the larger Environmental and Natural Resource Economics textbook.
Reading: TL Chapter 2 — The Economic Approach: Property Rights, Externalities, and Environmental Problems.
Coming next
Week 5 wraps up the shared-aquifer discussion and begins Lecture 5 with present value and discounting. Resource allocation across generations follows in Week 6.