Three applications of game theory to environmental and conflict economics

Chelsea Anne Pardini

doi:10.7273/000004761

Previous game-theoretic analyses of the settlement of the United States assume that Indigenous peoples and settler colonizers engaged in either free exchange or total war for land. In Chapter 1, I consider that settlers possess a structural power imbalance and can be violent before exchange. I find that they are strategically violent to more cost-effectively appropriate Indigenous peoples' lands. In addition, uncertainty about whether an agreement can ensure the avoidance of all-out conflict, affects initial violence and resistance; its effect depends on whether the Indigenous people can seek compensation. Chapter 1 underscores that even when settlers offer compensation, the land exchanges are fundamentally coercive. Chapter 2 and Chapter 3 are concerned with efforts to support growers' collective action to mitigate fungicide resistance. Fungicide resistance threatens grape growers' ability to achieve disease control through fungicide-based management. Each chapter considers that not all grape growers have access to accurate information about its severity. Chapter 2 contributes to the literature that provides insight into the strategic behavior of growers in the presence of fungicide resistance modeled as a negative intertemporal production externality. Considering a growers' agreement that requires one grower to reduce his fungicide use and be compensated by the other, I show that it induces the socially optimal level in complete information; when one grower is misinformed about fungicide resistance severity, it generates distortions. In Chapter 3, using a signaling game approach, I determine the conditions required for supporting an agreement similar to Chapter 2 in an incomplete information setting. The agreement can be supported if the compensation for fungicide reduction offsets the loss in benefits of deviating from the agreement and penalties for failing to compensate are sufficiently great. In this context, information is transferred to the uninformed grower about the true fungicide resistance severity. If the uninformed grower has sufficiently high beliefs that fungicide is severe regardless of the fungicide level applied by the informed grower, who is compensated sufficiently more for choosing low in severe resistance, then the agreement is not maintained; that is, the informed grower always applies a low level of fungicide.

Three applications of game theory to environmental and conflict economics

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