Stackelberg on the Danube: Games in the Anticommons

Abstract

We model the tragedy of the anticommons - the underutilization of a resource in the presence of multiple rights to exclude - as a Stackelberg price-leader game. We show that the equilibrium outcomes when the players move sequentially are more inefficient than when they move simultaneously in a ‘static’ version of the game. The results have important implications for the design of modern regulatory institutions, including the appointment of ‘super-bureaucrats’ or regulatory ‘czars’, the emergence of so-called patent trolls, tribal toll-collectors on the road from Pakistan to Afghanistan, climbing Mt. Everest, rent seeking contests, and antitrust law enforcement.