On the Optimal Taxation of Common-Pool Resources
Georgios Kossioris, epartment of Mathematics, University of Crete
Michael Plexousakis, Department of Applied Mathematics, University of Crete
Anastasios Xepapadeas, Athens University of Economics and Business and Beijer Fellow
Aart de Zeeuw, TSC, Tilburg University and Beijer Fellow
Recent research developments in common-pool resource models emphasize the importance of links with ecological systems and the presence of non-linearities, thresholds and multiple steady states. In a recent paper Kossioris et al. (2008) develop a methodology for deriving feedback Nash equilibria for non-linear differential games and apply this methodology to a common-pool resource model of a lake where pollution corresponds to benefits and at the same time affects the ecosystem services. This paper studies the structure of optimal state- dependent taxes that steer the combined economic-ecological system towards the trajectory of optimal management, and provides an algorithm for calculating such taxes.
Georgios Kossioris, Michael Plexousakis, Anastasios Xepapadeas, and Aart de Zeeuw,
"On the Optimal Taxation of Common-Pool Resources"
(September 13, 2010).
Fondazione Eni Enrico Mattei Working Papers.
Working Paper 490.