Revenue-sharing clubs provide economic insurance and incentives for sustainability in common-pool resource systems
Authored by Andrew R Tilman, Simon Levin, James R Watson
Date Published: 2018
DOI: 10.1016/j.jtbi.2018.06.003
Sponsors:
United States National Science Foundation (NSF)
Platforms:
No platforms listed
Model Documentation:
Other Narrative
Mathematical description
Model Code URLs:
Model code not found
Abstract
Harvesting behaviors of natural resource users, such as farmers,
fishermen and aquaculturists, are shaped by season-to-season and
day-to-day variability, or in other words risk. Here, we explore how
risk mitigation strategies can lead to sustainable use and improved
management of common-pool natural resources. Over-exploitation of
unmanaged natural resources, which lowers their long-term productivity,
is a central challenge facing societies. While effective top-down
management is a possible solution, it is not available if the resource
is outside the jurisdictional bounds of any management entity, or if
existing institutions cannot effectively impose sustainable-use rules.
Under these conditions, alternative approaches to natural resource
governance are required. Here, we study revenue-sharing clubs as a
mechanism by which resource users can mitigate their income volatility
and importantly, as a co-benefit, are also incentivized to reduce their
effort, leading to reduced over-exploitation and improved resource
governance. We use game theoretic analyses and agent-based modeling to
determine the conditions in which revenue-sharing can be beneficial for
resource management as well as resource users. We find that
revenue-sharing agreements can emerge and lead to improvements in
resource management when there is large variability in
production/revenue and when this variability is uncorrelated across
members of the revenue-sharing club. Further, we show that if members of
the revenue-sharing collective can sell their product at a price
premium, then the range of ecological and economic conditions under
which revenue-sharing can be a tool for management greatly expands.
These results have implications for the design of bottom-up management,
where resource users themselves are incentivized to operate in
ecologically sustainable and economically advantageous ways. (C) 2018
Elsevier Ltd. All rights reserved.
Tags
Agent-based model
Agriculture
Evolution
Cooperation
Management
Complex adaptive systems
Sustainability
Risk
Social-ecological systems
fisheries
human behavior
Framework
Insurance
Countries
Fisheries management
Common-pool
resource
Property resource
Index insurance
Optimal
risk