| Cooperative games are relevant to situations such as fishery agreements, whereby parties can increase both individual and total welfare and resource stock levels. However, in other cases, illegal activity as a result of imperfect monitoring may prevent cooperation from taking place, and thus a non-cooperative modelling is necessary. While maintaining the common element of game theory throughout, this thesis covers both of these situations, as well as the case where a government is strategically regulating a resource-using industry (the pharmaceutical or biotechnology industry) to satisfy its own conservation objectives. In the fishery contract chapter, cooperation regarding a shared (or transboundary) fish stock is modelled, accounting for both differences in breakdown (or non-cooperative) payoffs between the two players and the possibility that one (or both) players may be faced with incentives to conserve the stock independently of the present and future profits earned from direct harvesting. The former may be the consequence of a cost, accessibility, or geographic advantage, whereby the breakdown payoff (or "threat-point") becomes the starting point of negotiations for a cooperative agreement. The latter, often termed a "non-use" value, may result from some traditional, cultural, political, ideological or moral obligation, or may be linked to other factors such as the reliance of the population of a region on the stock in question, and potentially removes extinction from the optimal extraction set without relying on very low discount rates (which simply convey a player's willingness to trade-off present profits for future profits). Under the assumption that the parties negotiate a subgame perfect, or dynamically consistent, contract (as opposed to a binding contract), so that there is no incentive for either player to deviate from its negotiated harvest and share, outcomes which differ substantially from those previously found are possible.; Illegal activity (or poaching) is particularly relevant to endangered species protection and management. A sequential game is presented, whereby the government sets its own legal harvest quota and chooses its enforcement expenditure prior to the decisions of individual poachers so that incentives to poach are influenced by the conditions of the market (especially the output price) and the probability of being caught.; The final chapter examines the interaction between the government, which has to finance its own endangered species or biodiversity conservation costs, and a firm, which uses species (in a non-destructive way) to find products which can be sold to consumers. (Abstract shortened by UMI.)... |
