AGERE-E12 International Environmental Agreements

Yulia Pavlova & Marko Lindroos

Wed 12-14 C130

* = next lecture, todo

Updated 27.2.2018



40-55 points (%) 1

56-70 points (%) 2

71-80 points (%) 3

81-90 points (%) 4

91-100 points (%) 5


1 Basics of IEAs and game theory (Yulia)

-group work 1

-group work 2

Material for group work: Barrett 2003 Chapters


2 Gordon-Schäfer fisheries game (Marko)

Material: P. Pintassilgo, L.G. Kronbak & Marko Lindroos [2015]. International Fisheries Agreements: A Game Theoretical Approach. Environmental and Resource Economics 62, 689-705.

Group work: exercise in IEA-Part3.pdf


3 Ruseski two-level fisheries game (Marko)

Material: Ruseski 1998

Group-work: Assume that each country has only one vessel in the Ruseski model. Compare the Ruseski 2nd stage fisher game to the previous lecture two-player game. Discuss how you would expand the model to include more countries and how would that affect the model.


4 Coalition games (Marko)

Material: P. Pintassilgo, L.G. Kronbak & Marko Lindroos [2015]. International Fisheries Agreements: A Game Theoretical Approach. Environmental and Resource Economics 62, 689-705.

Group-work: Develop a coalition game of your choice by applying either the c-game or p-game approach.


5 Coalitions and stability (Yulia) *

Material for group work: de Zeeuw 2015 *

group work 3

Home Assignment



6 Dynamic games (Yulia)


Exam 28.2.
















Old material from previous courses

YLE13 Advanced Natural Resource Economics

Mon 10-12 room 340 (sh 11) and Tue 12-14 room C130.

* = next lecture, todo

Updated 5.12.2016



-ability to read the literature

-understand basic issues and models (dynamic, game theory)

-ability to formulate resource problems

-ability to solve simple problems



-you can get up to 40% of the points from article, presentation and exercises, the rest comes from the exam. For example you do the essay based on your chosen article but not excercises nor presentation your exam accounts for 90% of the grade

40-55 points 1

56-70 points 2

71-80 points 3

81-90 points 4

91-100 points 5


0 Brief introduction to optimal control theory 31.10. (updated 1.11.)



1 Non-renewable resources

1.1 Hotelling model 1.11.


1.2 Duopoly 7.11.


1.3 Two resources 8.11.


1.4 Matlab illustrations 21.11.



2 Renewable resources

2.1 Clark-Munro model 14.11.


2.2 Schäfer-Gordon model 15.11.

pdf pdfb

2.3 Non-cooperative game theory models 22.11. *

pdf pdfb

2.4 Coalition game models 28.11. & 29.11. *




Exercises *


Return weekly eg by email by the following Monday's lecture

1. Let the backstop price be 118, optimal time to exhaustion 50 and the discount rate 5%. Compute the optimal price of the competitive industry at t=0, t=10 and t=50. (return by 7.11. at 10.15)

example solution 1

2. Show that the optimal extraction path is decreasing in time. Further show that the competitive market's optimal extraction path is steeper compared to the monopoly extraction path. (return by 14.11. at 10.15)

example solution 2

3. doc (return by 21.11. at 10.15)

example solution 3

4. See lecture note (1.4) (return by 28.11. at 10.15)

5. See lecture note (2.3) (return by 5.12. at 10.15)

6. Compute stability of grand coalition for two 3-player games: a) c1=7, c2=17 and c3=20 & b) c1=7, c2=9 and c3=11 (return by 7.12.)

Additional exercise on Schäfer-Gordon model: Compute the Effort, Stock and Profit of optimal, MSY and open access case when p=1, c=6, K=10, q=1, R=0.8. (return by 5.12. at 10.15)

Article assignment


Write a 3-5 page essay in a group of 1-3 persons. Explain the model, its results and the link to the issues discussed during lectures.


Presentation of the article

10% Note. if you have ppt slide (max 3) to present send them to me in advance.

12.12. 5 min presentation



9.12. (You need to register in Weboodi)



Course books

Hanley, Shogren, White: Environmental Economics: In Theory and Practice, 2nd edition Chapters 7-9


Clark: Mathematical Bioeconomics: The Mathematics of Conservation, 3rd edition Chapters 1-3


(Incomplete) Article list (let me know which one you prefer, one group per article)

Chakravorty, Magne & Moreaux [2006]. A Hotelling model with a ceiling on the stock of pollution Journal of Economic Dynamics & Control 30 (2006) 2875–2904

Chakravorty, Moreaux, and Tidball [2008]. Ordering the Extraction of Polluting Nonrenewable Resources American Economic Review , 98:3, 1128–1144

Van der Werf, Edwin, and Sjak Smulders [2008]. "Climate Policy and the Optimal Extraction of High and Low Carbon Fossil Fuels." Canadian Journal of Economics (Elina Sailio)

P. Pintassilgo, M. Finus, Marko Lindroos and G. Munro [2010]. Stability and Success of Regional Fisheries Management Organizations. Environmental and Resource Economics 46, 377-402.

L. Kronbak and Marko Lindroos [2011]. On Species Preservation and Non-Cooperative Exploiters, Strategic Behavior and the Environment 1, 49-70. (Heini Koutonen & Tommi Tikkanen)

P. Pintassilgo, L.G. Kronbak & Marko Lindroos [2015]. International Fisheries Agreements: A Game Theoretical Approach. Environmental and Resource Economics 62, 689-705. (Kaius Oljemark, Riku Lindqvist & Kenneth Söderling)

E. Nieminen, L.G. Kronbak and Marko Lindroos [2016]. International Agreements of the Multispecies Baltic Sea Fisheries. Environmental and Resource Economics. (Vesa-Pekka Parkatti)

S. Oinonen, P. Levontin, K. Parkkila, E. Nieminen, H. Pulkkinen, A. Romakkaniemi, P. Pintassilgo, L.G. Kronbak, M. Laukkanen and Marko Lindroos [2016]. International fisheries management and recreational benefits: the case of the Baltic salmon. Marine Resource Economics. (Claudia Luengo)

Long, L.K. 2009. Regional fisheries management organisation with an endogenous minimum participation level for cooperation in straddling stock fisheries. Fisheries Research 97, 42-52.

Long, L.K. and O. Flaaten. 2011. A Stackelberg Analysis of the Potential for Cooperation in Straddling Stock Fisheries. Marine Resource Economics 26, 119-139.

Margrethe Aanesen, Claire Armstrong 2016. The political game of European fisheries management Environmental and Resource Economics.


Marko Lindroos


Material in Finnish


0 Optimiohjausteorian alkeita           .ppt

1 Uusiutumattomat luonnonvarat  

1.1 - 1.6 Hotellingin malli          .ppt     

1.7 Duopoli Hotellingin mallissa     .ppt 

1.8 Uusien esiintymien etsintä     .ppt

1.9 Uusiutumattomien luonnonvarojen yhteishyödyntäminen

1.10 Uusiutumattomien luonnonvarojen yhteishyödyntäminen & ympäristö

Matlab harjoitus *


2 Uusiutuvat luonnonvarat

2.1 Schäfer-Gordon -malli        .ppt

2.2 Clark-Munro -malli     .ppt   

2.3-2.5 Strateginen resurssin hyödyntäminen      .ppt   

2.6 Kaksivaiheiset pelit *


2.7 Monilajimallit   .ppt *





Seppo Salo: Optimiohjausteoria ja variaatiolaskenta

Leonard van Long: Optimal Control Theory and Static Optimization in Economics

Jon Conrad: Resource Economics

Conrad & Clark: Natural Resource Economics

Lee Anderson (ed.) (2002): "Fisheries Economics: Collected Essays", Ashgate. (esim. Clark & Munro artikkeli löytyy täältä)

Grafton et al. Handbook of Marine Fisheries Conservation and Management

Tentit 80%  laitostenttien yhteydessä 17.10., 7.11., 5.12.
Ilmoittautuminen WebOodiin.





Marko Lindroos

s-posti: etunimi.sukunimi ät

Ympäristöekonomian opetuksen kotisivulle