Competing for endogenous Information in an Irreversible Environmental Resource Problem: a Game-Theoretic Analysis

Abstract The paper analyzes strategic behavior in a two-stage environmental choice problem under di¤erent information scenarios. Given uncertainty about environmental cost and irreversibility of development, “learning without destroying”emerges from strategic competition when information is endogenous and publicly available. This happens since agents trade o¤ the higher payo¤of being the …rst-mover against the potentially free acquisition of endogenous information without developing their own environmental endowment. We prove that in a 2X2 dynamic environmental game with payo¤ uncertainty and irreversibility publicly available endogenous information could lead players to destroy less in aggregate terms with respect to the case in which information is exogenous. JEL references: C72; D81; Q32.