Externalities, market power, and resource extraction

Manjira Datta, Leonard J. Mirman

Research output: Contribution to journalArticlepeer-review

34 Scopus citations


This article analyzes the effect of market power in the presence of dynamic and biological externalities. When several countries harvest fish in international waters the evolution of fish population is affected by their joint action, thus generating a biological and a dynamic externality. If there is trade, the market-clearing prices depend on the harvesting and consumption in all countries. Therefore, market-clearing prices also generate an externality. We find a subgame perfect Cournot-Nash equilibrium and study the conditions under which it may be efficient. We also analyze the role of different externalities in generating inefficiency.

Original languageEnglish (US)
Pages (from-to)233-255
Number of pages23
JournalJournal of Environmental Economics and Management
Issue number3
StatePublished - May 1999


  • Efficiency
  • Externality
  • Market power
  • Tragedy-of-the-commons

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law


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