Felix, tarry, and Raphael are lumberjacks who live next to a forest that is open

Question

Felix, tarry, and Raphael are lumberjacks who live next to a forest that is open to logging; in other words, anyone is free to use the forest for logging. Assume that these men are the only three lumberjacks who log in this forest and that the forest is large enough for all three lumberjacks to log intensively at the same time. Each year, the lumberjacks choose independently how many acres of trees to cut down; specifically, they choose whether to log intensively (that is, to clear-cut a section of the forest, which hurts the sustainability of the forest if enough people do It) or to log nonintensively (which does not hurt the sustainability of the forest). None of them has the ability to control how much the others log. and each lumberjack cares only about his own profitability and not about the state of the forest. Assume that as long as no more than one lumberjack logs intensively, there are enough trees to regrow the forest However, if two or more to intensively, the forest will become useless in the future. Of course, logging intensively earns a lumberjack more money and greater profit because he can sell more trees. The forest is an example of because the trees in the forest are and Depending on whether Larry and Raphael both choose to log either intensively or intensively, fill in Felix's profit -maximum response in the following liable, given Lorry no Raphael's actions. Which of the following solutions could ensure that the forest is sustainable in the long run, assuming that the regulation is enforceable' Check all that apply. Develop a program that entices more lumberjacks to move to the area. Convert the forest to private property, and allow the owner to sell logging rights.

Explanation / Answer

Answer:

(1) The forest is an example of a common resource because the trees in the forest are excludable and rival in consumption

(2) Depending on whether Larry and Raphael both choose to log either non-intensively or intensively, fill in Felix’s profit-maximizing response in the following table, given Larry and Raphael’s actions.

     Suppose Larry and Raphael both choose to log non-intensively; then Jake's most rational response is: Log intensively. Because non-intensively would be best choice for both, but only for Felix it will be profitable to cheat, however he will be caught by other lumberjack.

     Suppose Larry and Raphael both choose to log intensively; then Jake's most rational response is: Log intensively.

(3) Which of the following solutions could ensure that the forest is sustainable in the assuming that the regulation is enforceable? Check all that apply.

(C) Convert the forest to private property, and allow the owner to sell logging rights.

   The forest equally divy up to either between the lumberjacks, or convert it to private property and sell the rights. This way the lumberjacks will either have more incentive to NOT intensively log their own patch or the owner of the land will have more incentive to NOT allow intensive logging.

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.