Theoretical Economics, Volume 19, Number 2 ( 2024)

Theoretical Economics 19 (2024), 743–781


On competition for spatially distributed resources in networks

Giorgio Fabbri, Silvia Faggian, Giuseppe Freni

Abstract


This study examines the dynamics of the exploitation of a natural resource distributed among and flowing between several nodes connected via a weighted, directed network. The network represents the locations and interactions of the resource nodes. A regulator decides to designate some of the nodes as natural reserves where no exploitation is allowed. The remaining nodes are assigned (one-to-one) to players, who exploit the resource at the node. It is demonstrated how the equilibrium exploitation and resource stocks depend on the productivity of the resource sites, the structure of the connections between the sites, and the number and preferences of the agents. The best locations to host nature reserves are identified per the model's parameters and correspond to the most central (in the sense of eigenvector centrality) nodes of a suitably redefined network that considers the nodes' productivity.

Keywords: Harvesting, spatial models, differential games, nature reserves

JEL classification: Q20, Q28, R11, C73

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