Tuesday, December 23, 2008

Modelling Resource Competition

I hacked through the NEP-IPR (intellectual property rights papers) and the NEP-TID (technology and industrial papers) accumulation today, but nothing blogworthy accumulated in five months, so I'll have to talk about something else.

An idea that's been preoccupying me recently is how to model a process where multiple agents have the option to invest in a safe activity or in an activity that follows a typical Bellman problem, e.g. a fishery where the return in any given period decreases with total effort and the stock depletes over time depending upon the time path of effort.

I assume the game theory literature has already considered this situation extensively, but I'm ill-equipped to read it (and I originally conceived it macroeconomically as a pair of nation-states). Presumably the result depends extensively on whether their utility functions are interdependent and if enforcement/punishment mechanisms exist.

POSTSCRIPT: Sometimes I feel guilty that I have basically no scope to comment on current affairs.

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