1. Theory of the “Commons” Discussing 3 classic papers on Common Property Resources, Public Goods, Easy Riders Richard Cornes and Todd Sandler. On Commons and Tragedies The American Economic Review, 73(4):787 – 92, September 1983. Richard Cornes and Todd Sandler Easy Riders, Joint Production and Public Goods The Economic Journal, 94: 580-98, September 1984. H. Scott Gordon Economic Theory of a Common-Property Resource: The Fishery The Journal of Political Economy, 62 (2):124-142, April 1954.

2. H. Scott Gordon: Economic Theory of a Common-Property Resource - The Fishery Overexploitation of natural resources happens because of the absense of economic rent Renewable (fish, forest) vs non-renewable (oil) resources

3. Cornes & Sandler: On Commons and Tragedies Market failures are often tragedies of the commons AP(  ) = rental rate ≠ MP(  ) Normally environmental exploitation follows Nash Eqm Nash & Pareto Equlibria are contrastedNashPareto This paper uses: non-Nash behavior (non-zero conjectures) Technology functions use (fish, fishing grounds, fishing vessels) Degree of exploitation depends on conjecture and technology

4. Cornes & Sandler: Easy Riders, Joint Production & Public Goods Standard propositions about public goods –Suboptimality increases with size –Stability of N Eqm depends on the sign on the income effect –Nash behavior is always inefficient for public goods –Identical individuals provide symmetric eqm Paper states that these propositions break down for goods with private & public features.

5. Nash Equlibrium When the second agent’s reaction generates the same action from the initial agent that stimulated the reaction. In a 2 person non-cooperative game, this would be the intersect of optimal strategies of both parties. Eg. 2 agents supplying bottled water from a free well would end up servicing 1/3 each.

6. Pareto Equilibrium Resource A Resource B PPF showing Pareto Eqm Any changes would make someone worse off