natural resource management: a network perspectivemanager.unsdsn.gr/uploaded_files/articles/... ·...

NaturalResources andNetworks

Kyriakopoulou,Xepapadeas

Howimportant arenetworks?

NetworkFormation

EnvironmentalandResource-UseNetworks

ResourceManagement:A NetworkPerspective

Dynamics ofNetworkFormation

OptimalResourceExploitation

Discussion

Natural Resource Management: A NetworkPerspective

Efthymia Kyriakopoulou1 and Anastasios Xepapadeas2

Advanced Policy Workshop:Sustainability and Resource Valuation,

SDSN-Greece, Athens

Université du Luxembourg1 , Athens University of Economics and Business2

28 June 2017

Kyriakopoulou, Xepapadeas (UL,AUEB) Natural Resources and Networks 28 June 2017 1 / 57




NetworkFormation





Discussion

How important are networks?

Social Networks

Social networks influence behavior

criminal activities,votingenvironmentally-friendly behaviors, recyclingsmokingtrainingstudying

Social and economic interactions are shaped by the localstructure of network

sharing of information, risk etc.transmission of opinions, viruses...information about jobspolitical alliances, environmental allianceschoices of education.





NetworkFormation





Discussion


Friendship Network (Colors: grade)

Source: Crnovrsanin et al. "Visualization of friendship and aggression networks".

Nodes: Students, Line: indicates a friendship.By color-coding the nodes by grade, we see that these clusters are primarily organized by grade.





NetworkFormation





Discussion


Friendship Network (Colors: gender)

Source: Crnovrsanin et al. "Visualization of friendship and aggression networks".

Nodes: Students, Line: indicates a friendship.Some grades are segregated by gender and others are not.





NetworkFormation





Discussion


Transportation Network (Athens Metro Map)





NetworkFormation





Discussion


Transportation Network (Athens InternationalAirport as a hub)





NetworkFormation





Discussion


Powerful Families and Florentine Marriages, 1430’s

Source: Jackson, 2008.Kyriakopoulou, Xepapadeas (UL,AUEB) Natural Resources and Networks 28 June 2017 7 / 57




NetworkFormation





Discussion


Better-rated employees

Source: Cross, 2011, The Most Valuable People in Your Network, Harvard Business Review

Better-rated employees look more like Susan than Richard.

Innovative employees don’t have bigger networks, but bridging ties, that connect them to other

employees who are themselves less connected.

People with ties to the less-connected are more likely to hear about ideas that haven’t gotten

exposure elsewhere





NetworkFormation





Discussion


Questions

What do we know about network structure?

How do networks form?

How close are the observed networks to the optimalnetwork structure?

How do networks influence behavior?

How do behaviors influence network structure?





NetworkFormation





Discussion


Non-Market Interactions & Externalities

Model and explain non-market interactions.

Interactions involve externalities, both positive andnegative.

Example 1: a person gets a job in a growing company →this may benefit her friends who will learn quickly aboutnew opportunities.

Example 2: Second-hand smoking, imposed by a smokerto surrounding people.

Understanding externalities is important for policy.





NetworkFormation





Discussion

How important are networks? Formation and Behaviors

Networks are important because they drive behavior incases that involve systematic externalities.

Two basic themes emerge from this observation:

1 Network Formation

Random Network Models. Relationships are governedpurely by some stochastic processStrategic Network Models. The payoff or net benefit of arelationship depends potentially on the larger network

2 Networks and Behaviors

Diffusion and LearningGames on Networks





NetworkFormation





Discussion


1 Network Formation

people do not consider the full societal impact of theirdecisions to form or maintain links / relationships. →Suboptimal Network Formation.

2 Networks and Behaviors

behaviors that involve peer interactions, such as choices toundertake criminal activities, or to adopt a new technology.

Positive externalities lead decisions to be taken at a lowlevel.Negative externalities lead decisions to be taken at toohigh a level, relative to social optimum.





NetworkFormation





Discussion


Network Formation: Routes

Which networks form?

Random graph models - "How"Economic / Game theoretic models - "Why"





NetworkFormation





Discussion

Network Formation

Game Theoretic Models

Costs and benefits for agents who are associated with eachnetwork

Agents choose to connect or not with other agents

Private incentives vs. social effi ciency.





NetworkFormation





Discussion

Network Formation

Modeling Choices

How should we model agents’incentives to form or severlinks:

can these incentives cause changes in the networkstructure?is consensus needed?are agents rational?is the process dynamic or static?can they compensate each other for creating a relationship?





NetworkFormation





Discussion

Network Formation

Relevant Questions

Are networks stable?

Which networks are likely to form?

Are observed networks effi cient?

What is the gap between market and effi cient networks?

Can policy interventions improve effi ciency?

Which policy instruments could be used?





NetworkFormation





Discussion

Network Formation

How does network structure affect behavior?

Diffusion: Infection, contagion.Learning: Information, opinionsGames on networks: decisions, choices.





NetworkFormation





Discussion

Network Formation

Diffusion

Spread of Tuberculosis (McKenzie et al., 2006). Black nodes: persons with clinical disease, pink nodes:

exposed persons with dormant infection, green nodes: exposed persons with no infection.





NetworkFormation





Discussion

Network Formation

Learning

Modelling:

DeGroot model:

Repeated communicationNaive updating of beliefs: information comes only once(weighted average of neighbors beliefs)Network structure plays an important role

Bayesian learning:

Observe each otherRepeated actions over time (optimal informationextraction)Homogeneity of actions and payoffsComputationaly demanding





NetworkFormation





Discussion

Network Formation Games on Networks

Modelling

Agents make real decisions

not just diffusion or updating of beliefs

Complementarities or Substitutabilities

Strategic interplay

Inter-dependencies

Equilibrium existence and structure

Equilibrium response to network structure





NetworkFormation





Discussion


Complements / Substitutes

Strategic Complements:

For all i , a ≥ a′ :ui (1, a)− ui (0, a) ≥ ui (1, a′)− ui (0, a′)My friend’s choice to take an action increases my relativepayoff to take that action.

Strategic Substitutes:

For all i , a ≥ a′ :ui (1, a)− ui (0, a) ≤ ui (1, a′)− ui (0, a′)My friend’s choice to take an action decreases my relativepayoff to take that action.





NetworkFormation





Discussion


Externalities

Other’s behaviors affect my utility / welfare.

Others’behaviors affect my decisions, actions, opinions.

→ Others’actions affect individual payoffs.

Traditional game theory: each agent interacts witheveryone else.

Games on networks: each agent interacts with theirneighbors.

→ Agents interact with a different number of neighbors.→ New links may be formed / severed in case of dynamicnetworks.





NetworkFormation





Discussion


Examples

Strategic Complements: conformism and imitation.

Recycling, energy-saving decisions (peer effects)Education decisionsSmokingLearn a language

Strategic Substitutes: incentives to free ride.

Local public goods (share products)Information gathering





NetworkFormation





Discussion

Network Formation Network Formation & Pairwise Stability

Agents may be able or not to form links without theconsent of their neighbors.

Modelling depends on specific economic problem.Unilateral link formation is allowed in cases of literaturecitations or Internet site referrals.Mutual link formation is required in internationalenvironmental agreements, information / technologysharing, friendships, and in the majority of socioeconomicproblems.

→ This leads to the notion of pairwise stability (Jacksonand Wolinsky, 1996): agents coordinate to form profitable links→ a stable network is obtained when no agent wishes to form anew link or no agent want to (unilaterally) sever existing links.





NetworkFormation





Discussion

Network Formation Applications of Social Networks

The main areas where social networks have been studied(overview Jackshon and Zenou, 2015, Jackson, Rogers &Zenou, 2016)

Financial networks (Kelly & Ó Gráda (2000), Elliott etal. (2014), Acemoglu et al. (2015)).

Labour markets (Ioannides & Loury (2004), Wahba &Zenou (2005), Calvó-Armengol & Jackson (2004,2007)).

Education (Zimmerman (2003), Calvó-Armengol et al.(2009), Sacerdote (2011)).

Crime (Patacchini & Zenou (2008), Calvó-Armengol et al.(2005))

Development economics (Banerjee et al. (2013),Beaman et al. (2016)).

Exchange theory, bargaining and trade (Cook &Cheshire (2013), Condorelli & Galeotti (2016), Manea(2016)).





NetworkFormation





Discussion

Environmental and Resource-Use Networks

Environmental Networks

Analysis of environmental and resource economics

ExternalitiesPolicies to correct the detrimental externalitiesUse of social networks where nodes could be:

polluting firms,firms adopting clean technologiesagents harvesting an exhaustible or a renewable resource,countries emitting greenhouse gases and adoptingmitigation or adaptation policiesconsumers engaging in polluting or pollution reducingactivities.





NetworkFormation





Discussion

Environmental and Resource-Use Networks


Despite the straightforward association of environmentalissues with social networks very little research has beenundertaken.

A broad discussion on how networks can be used in thecontext of environmental issues can be found in Currarini,Marchiori and Tavoni (2016).

Adoption of innovative, environmentally-friendlytechnologies by firms (Conley and Udry, 2001)

Common-pool resource use with multiple sources andcities, (İlkiliç, 2011).





NetworkFormation





Discussion

Environmental and Resource-Use Networks Complementarities and Substitutabilities

Particular characteristic of environmental networks: theycan be characterized by strategic heterogeneity.

Strategic heterogeneity : the network includes bothstrategic complementarities and substitutabilities.

Strategic complementarities: Links indicating costreducing technology agreements and /or cooperationamong agents.Strategic substitutabilities.: congestion effects orincreasing search or extraction costs when the stock of aresources is depleted.

The study of strategic heterogeneity will provide newinsights in terms of market outcomes and policy to attainthe social optimum.





NetworkFormation





Discussion

Resource Management: A Network Perspective

In Kyriakopoulou and Xepapadeas (2017), we study anetwork associated with the exploitation of a depletableresource which is characterized by strategic heterogeneity.

Purpose:

Study market outcomes associated with specific networkstructures.Social optimum when regulator focuses on development.Social optimum when regulator focuses on resourceconservation.Characterize the most effi cient market structures.Policies that will control:

the level of externalitiesthe desired link structure among agents

Show that ineffi cient policies emerge when ignoring thenetwork structure.





NetworkFormation





Discussion


A network consisting of three agents located at distinctspatial points and exploiting a depletable resource (locatedat a different site).

The exploited quantity depends on (following Smith, 1968,1969):

resource stock externalities,crowding externalitiespositive technological spillovers

Market outcome: agents maximize their private profits.Social Optimum 1: maximization of the private value of thenetwork (sum of agents’payoffs)

Social Optimum 2: Social Optimum 1 + conservation value(which captures the exhaustible nature of the resource).

We show that the special nature of natural resources calls fordifferent treatments than producible goods, and if ignored, weend up in overexploitation of the resource.





NetworkFormation





Discussion


1 Model2 Market outcome3 Theory of Dynamics of Network Formation4 Application of Dynamic Theory in the current framework5 Extension: Introducing Heterogeneity6 Optimal Outcome7 Discussion of Effi cient Network Structures





NetworkFormation





Discussion

Resource Management: A Network Perspective Decentralized Competitive Equilibrium

Congestion Externalities

1 resource, 3 agents

Figure: A 3-agent resource network with congestion externalities.





NetworkFormation





Discussion



1 resource, 3 agents

Harvest function:

H(E ,S) = qES

E : amount of effort during harvesting

S : resource stockq : "catchability-coeffi cient".The pay-off of agent i will be:

ui = pHi −β

2(Ei )

2 − γHi3

∑j = 1j 6= i

Hj





NetworkFormation





Discussion



Maximization problem:

maxHi

pHi −β

2

(HiqS

)2︸︷︷︸private cost

− γHi3

∑j = 1j 6= i

Hj

︸︷︷︸congestion cost

and the solution:

H∗i =pq2S2

β+ 2γq2S2

Notice that dH∗i

dS > 0, larger stock → higher harvestedamount.No congestion: price equals private marginal cost,p = β

(Hiq2S 2

), which leads to Hoi =

pq2S 2

β

Congestion reduces the use of the resource, i.e. H∗i < Hoi





NetworkFormation





Discussion

Resource Management: A Network Perspective Exhaustability

Since the resource is exhaustible in the one-shot game, theeshaustability condition is:

3H∗i = S , or 3pq2S2

β+ 2γq2S2= S (1)

For p = 1, β = 1, q = 0.3,γ = 0

No congestion externalities





NetworkFormation





Discussion


For p = 1, β = 1, q = 0.3,γ = 0.075

Congestion externalities





NetworkFormation





Discussion



Individual profits under the presence of this negative externalityare given by:

u∗i =βp2q2S2

2(β+ 2γq2S2)2

while aggregate profits are given by:

u∗T =3βp2q2S2

2(β+ 2γq2S2)2





NetworkFormation





Discussion


Congestion Externalities & Technological Spillovers

Figure: Resource network with technological spillovers and congestionexternalities.





NetworkFormation





Discussion



Individual payoffs are given by:

ui = pHi −β

2

(HiqS

)2︸︷︷︸private cost

− γHi3

∑j = 1j 6= i

Hj

︸︷︷︸congestion cost

+ δ3

∑j = 1j 6= i

gijHiHj

︸︷︷︸technology spillover effect

Notice that gij shows the presence of a link between two agents.

gij could take values 0 < gij < 1.

Here gij = 1 when a collaboration link is formed.

Individual harvesting is given by:

H̃i =pq2S2

β+ 2(γ− δ)q2S2





NetworkFormation





Discussion



Individual payoffs are given by:

ũi =βp2q2S2

2(β+ 2(γ− δ)q2S2)2

and aggregate payoffs:

ũT =3βp2q2S2

2(β+ 2(γ− δ)q2S2)2

Notice that: H̃i > H∗i → harvesting is higher when agentscollaborate and share technological advances andknowledge.The positive technological spillovers (fully or partly)outweigh the negative congestion effect, lead to higher useof the resource and higher individual and aggregate profits.





NetworkFormation





Discussion

Dynamics of Network Formation

Market Equilibrium

Decisions of harvesting agents to create or sever existingcooperation links.

This will determine the structure of the network at the endof the period → Effi cient Market Network Structure(MNS)

Regulator’s Optimum

Maximize aggregate payoffs (plus the conservation valueof the resource)

and decide at the beginning of the period to retain orsever cooperation links → Socially effi cient NetworkStructure. (SNS)

If MNS 6= SNS, the regulator can intervene and provideincentives schemes.





NetworkFormation





Discussion

Dynamics of Network Formation Market Network Structure

Assume no cooperation links at the beginning of theperiod (star-shaped network).

ûi(HS | −ij

), i , j = 1, 2, 3 , i 6= j : maximized payoff of

each agent (no links exist)

HS : the vector of profit maximizing harvesting when thenetwork is star-shaped.

Cooperation: should be profitable for both agents.

H : the vector of profit maximizing harvesting at eachnetwork structure

+ij : link ij is created−ij : link is not created, i , j = 1, 2, 3 , i 6= j .





NetworkFormation





Discussion


All agents create cooperation links, if

ui (H | +ij) > ûi(HS | −ij

), i , j = 1, 2, 3 , i 6= j ,

No cooperation links are created and the star shapednetwork will remain until the end of the period, if

ui (H | +ij) < ûi(HS | −ij

), i , j = 1, 2, 3 , i 6= j

All the network structures described above are pair-wisestable (Jackson and Wolinsky, 1996).





NetworkFormation





Discussion

Dynamics of Network Formation Fully or Partly Connected Network?

Full network Pareto dominates the unconnected network→ H̃T > H∗T (aggregate use of the resource) andũT > u∗T (aggregate profits).What if 2 of the agents decide to collaborate withoutincluding the 3rd agent in the first step.

Figure: A partly-connected network





NetworkFormation





Discussion

Dynamics of Network Formation Fully or Partly Connected Network?

What if 2 of the agents decide to collaborate withoutincluding the 3rd agent in the first step.

We show that Ĥ1 = Ĥ2 > Ĥ3 and û1 = û2 > û3 →collaboration is profitable for the two connected agents.

But it is only conditionally profitable for all the agents tomove from a partly to a fully connected network:

ũ1,2 > û1,2 if β > 2γq2S2 and ũ3 > û3 if β > δq2S2.

If ũ3 > û3, but û1,2 > ũ1,2,→ only agent 3 has a benefitto join the collaboration, but it is not profitable for 1 & 2.

If ũ3 − û3 > 2(û1,2 − ũ1,2), agent 3 could offer a bribeequal to û1,2 − ũ1,2 to each one of agents 1 and 2 andmake them interested in collaborating with her.





NetworkFormation





Discussion

Dynamics of Network Formation Introducing Heterogeneity

Assume that transportation is costly and cost depends on thegeographical distance between the agent and the resource.

Figure: Introducing heterogeneity: different geographical distancebetween the agent and the resource.





NetworkFormation





Discussion


li ∈ (0, 1] :location of the agent i , defined as her distancefrom the resource,

τ : marginal transportation cost.

Then, the pay-off of agent i will be:

ui = pHi −β

2(Ei )

2 − τliHi − γHi3

∑j 6=iHj

Individual harvesting is given by:

H∗∗i =

[β(p − τli )− γq2S2

(p + τ

(li − ∑

j 6=ilj

))]q2S2

(β− γq2S2) (β+ 2γq2S2)

Notice that dH∗∗idli

< 0 and dH∗∗idlj

> 0.





NetworkFormation





Discussion


If agents are linked:

Figure: Technological spillovers between heterogeneous agents.





NetworkFormation





Discussion


If agents are linked, individual harvesting is given by:

H̄i =

[β(p − τli ) + (δ− γ)q2S2

(p + τ

(li − ∑

j 6=ilj

))]q2S2

(β+ (δ− γ)q2S2) (β− 2(δ− γ)q2S2)

Note that in this case:dH̄idli < 0 (as before), butdH̄idlj< 0.

With strong positive spillover effects (δ− γ) > 0), agent’sj harvest affects the use of the resource by agent ipositively.

Larger distance between agent j and and the resource →reduces j ′s harvest which affects agent i negatively.





NetworkFormation





Discussion

Optimal Resource Exploitation

Congestion Spillovers

The regulator chooses H1,H2,H3, to maximize total welfare:

maxW (Hi ) = maxH1,H2,H3

3

∑i=1

pHi −β

2

(HiqS

)2− γHi

3

∑j = 1j 6= i

Hj

Optimal harvesting is given by:

HSi =pq2S2

β+ 4γq2S2

while the value of the network is given by:

W (HSi ) =3p2q2S2

2(β+ 4γq2S2)





NetworkFormation





Discussion

Optimal Resource Exploitation Exhaustability

Optimal exploitation and exhaustability





NetworkFormation





Discussion


Congestion & Technological Spillovers


maxH1,H2,H3

3

∑i=1

[pHi −

β

2

(HiqS

)2+ δ

3

∑j=1,j 6=i

gijHiHj − γHi3

∑j=1,j 6=i

Hj

]Optimal harvesting is given by:

H̃Si =pq2S2

β+ 4(γ− δ)q2S2


W (H̃Si ) =3p2q2S2

2(β+ 4(γ− δ)q2S2)

When congestion externality dominates, ((γ− δ) > 0),Optimal harvesting < Decentralized harvesting.

When positive externality dominates, ((γ− δ) < 0), Optimalharvesting > Decentralized harvesting.





NetworkFormation





Discussion


Congestion & Technological Spillovers


maxH1,H2,H3

3

∑i=1

[pHi −

β

2

(HiqS

)2+ δ

3

∑j=1,j 6=i

gijHiHj − γHi3

∑j=1,j 6=i

Hj

]Optimal harvesting is given by:

H̃Si =pq2S2

β+ 4(γ− δ)q2S2


W (H̃Si ) =3p2q2S2

2(β+ 4(γ− δ)q2S2)

When congestion externality dominates, ((γ− δ) > 0),Optimal harvesting < Decentralized harvesting.When positive externality dominates, ((γ− δ) < 0), Optimalharvesting > Decentralized harvesting.





NetworkFormation





Discussion


Optimal Network Structure

The value of the optimal network under congestion forcesis:

W (HSi ) =3p2q2S2

2(β+ 4γq2S2)

The value of the optimal network under congestion andpositive externalities is:

W (H̃Si ) =3p2q2S2

2(β+ 4(γ− δ)q2S2)It is clear that: W (H̃Si ) > W (H

Si ).

Thus, the fully connected network is the sociallyeffi cient network structure.Since moving from the partly to the fully connectednetwork is not always profitable for all the agents involved,the regulator should intervene and implement policies thatwill achieve the socially effi cient market structure





NetworkFormation





Discussion




W (HSi ) =3p2q2S2

2(β+ 4γq2S2)The value of the optimal network under congestion andpositive externalities is:

W (H̃Si ) =3p2q2S2

2(β+ 4(γ− δ)q2S2)

It is clear that: W (H̃Si ) > W (HSi ).






NetworkFormation





Discussion




W (HSi ) =3p2q2S2


W (H̃Si ) =3p2q2S2


Si ).






NetworkFormation





Discussion




W (HSi ) =3p2q2S2


W (H̃Si ) =3p2q2S2


Si ).

Thus, the fully connected network is the sociallyeffi cient network structure.

Since moving from the partly to the fully connectednetwork is not always profitable for all the agents involved,the regulator should intervene and implement policies thatwill achieve the socially effi cient market structure





NetworkFormation





Discussion




W (HSi ) =3p2q2S2


W (H̃Si ) =3p2q2S2


Si ).






NetworkFormation





Discussion

Optimal Resource Exploitation Conservation and Optimal Use of the Resource

Connected Network

The regulator chooses H1,H2,H3, to maximize total welfaretaking into account that there is welfare loss when the stockof the resource decreases, i.e

maxW P (Hi ) = maxH1,H2,H3

3

∑i=1ui (H, g) + κ

(S −

3

∑i=1Hi

)Optimal harvesting is given by:

H̃Pi =(p − κ)q2S2

β+ 4(γ− δ)q2S2


W (H̃Pi ) =

(2βκ + q2S [3(κ2 + p2) + 2κ(4S(γ− δ)− 3p)]

)S

2(β+ 4(γ− δ)q2S2)

H̃Pi < H̃Si → the higher the value of the preserved resource,

the higher the distance between the two optimal harvests.Kyriakopoulou, Xepapadeas (UL,AUEB) Natural Resources and Networks 28 June 2017 55 / 57




NetworkFormation





Discussion


Unconnected Network


HPi =(p − κ)q2S2β+ 4γq2S2


W (HPi ) =

(2βκ + q2S [3(κ2 + p2) + 2κ(4Sγ− 3p)]

)S

2(β+ 4γq2S2)

Notice that HPi < H̃Pi → harvest is higher in the fully

connected network

but W (HPi ) ≷W (H̃Pi ) → depending on the value of κ,collaboration between agents (that increases resourceexploitation) could lead to either higher or lower welfare.For suffi ciently high κ values, the fully connectednetwork leads to lower welfareSocially effi cient network structure: Unconnected Network





NetworkFormation





Discussion


Unconnected Network




W (HPi ) =

(2βκ + q2S [3(κ2 + p2) + 2κ(4Sγ− 3p)]

)S

2(β+ 4γq2S2)


connected networkbut W (HPi ) ≷W (H̃Pi ) → depending on the value of κ,collaboration between agents (that increases resourceexploitation) could lead to either higher or lower welfare.

For suffi ciently high κ values, the fully connectednetwork leads to lower welfareSocially effi cient network structure: Unconnected Network





NetworkFormation





Discussion


Unconnected Network




W (HPi ) =

(2βκ + q2S [3(κ2 + p2) + 2κ(4Sγ− 3p)]

)S

2(β+ 4γq2S2)


connected networkbut W (HPi ) ≷W (H̃Pi ) → depending on the value of κ,collaboration between agents (that increases resourceexploitation) could lead to either higher or lower welfare.For suffi ciently high κ values, the fully connectednetwork leads to lower welfare

Socially effi cient network structure: Unconnected Network





NetworkFormation





Discussion


Unconnected Network




W (HPi ) =

(2βκ + q2S [3(κ2 + p2) + 2κ(4Sγ− 3p)]

)S

2(β+ 4γq2S2)


connected networkbut W (HPi ) ≷W (H̃Pi ) → depending on the value of κ,collaboration between agents (that increases resourceexploitation) could lead to either higher or lower welfare.For suffi ciently high κ values, the fully connectednetwork leads to lower welfareSocially effi cient network structure: Unconnected Network





NetworkFormation





Discussion

Discussion


Natural resource management problems → Externalities→ Different Network Structures.

Socially Effi cient Network Structure → Policies to form oreliminate links between agents.

Strategic Heterogeneity (particular characteristic ofenvironmental networks) was shown to provide newinsights in network formation.

The regulator who focuses more on the conservation of theresource rather than economic development definesdifferent optimal network structures.

Network analysis can be used to numerous environmentalproblems.





NetworkFormation





Discussion

Discussion


Natural resource management problems → Externalities→ Different Network Structures.

Socially Effi cient Network Structure → Policies to form oreliminate links between agents.

Strategic Heterogeneity (particular characteristic ofenvironmental networks) was shown to provide newinsights in network formation.

The regulator who focuses more on the conservation of theresource rather than economic development definesdifferent optimal network structures.

Network analysis can be used to numerous environmentalproblems.


How important are networks?Formation and Behaviors

Network FormationGames on NetworksNetwork Formation & Pairwise StabilityApplications of Social Networks

Environmental and Resource-Use NetworksComplementarities and Substitutabilities

Resource Management: A Network PerspectiveDecentralized Competitive EquilibriumExhaustability

Dynamics of Network FormationMarket Network StructureFully or Partly Connected Network?Introducing Heterogeneity

Optimal Resource ExploitationExhaustabilityConservation and Optimal Use of the ResourceConservation and Optimal Use of the Resource

Discussion

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