THE COMMONS WITH CAPITAL MARKETS
Download| Volume 1 Issue 2 2005 | |
|---|---|
| Author(s): |
Colin Rowat
Jaysari Dutta
|
| Abstract | We explore common problems when agents have access to capital markets. The commons has a high intrinsic rate of return but its fruits cannot be secured by individual agents. Resources transferred to the capital market earn lower retuns, but are secure. In a two period modeel, we assess the consequences of market access for the commons survival and welfare; we compare strategic and competitive equilibria. Market access generally speeds extinction, with negative welfare consequences. Against this, it allows intertemporal smoothing, a positive effect. In societies in which the former ctfect dominates, marker liberalization may be harmful. We reproduce the multiple equilibria found in other models of competitive agents, when agents are strategic, extinction dates are unique. Strategic agentsS generally carn their surplus by delaying the commons extinction, in unusual cases, strategic agents behave as competitive ones even when thcir numbers are small. |
| Keywords | Strategic Equilibrium, Competitive Equilibrium, Rational Expectations Equilibrium, Markov Perfect Equilibrium, Autarky. |
| Year | 2005 |
| Volume | 1 |
| Issue | 2 |
| Type | Research paper, manuscript, article |
| Recognized by | Higher Education Commission of Pakistan, HEC | Category | "Y" | Journal Name | IBT Journal of Business Studies | Publisher Name | ILMA University | Jel Classification | - | DOI | https://doi.org/10.46745/ILMA.jbs.2005.12.04 | ISSN no (E, Electronic) | 2409-6520 | ISSN no (P, Print) | 2416-8393 | Country | Pakistan | City | Karachi | Institution Type | University | Journal Type | Open Access | Manuscript Processing | Blind Peer Reviewed | Format | Paper Link | http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/1.2/4.%20The%20Common%20with%20Capital%20Markets.pdf |