Strategic exploitation with learning and heterogeneous beliefs

We study the effect of learning with heterogeneous beliefs on the exploitation of a renewable common-pool resource. To that end, we extend the Great Fish War model of Levhari and Mirman (1980) to a learning environment in which several agents interact strategically and learn about the distribution of the stochastic evolution of the resource. We find that the effect of anticipation of learning with heterogeneous beliefs is twofold. First, the anticipation of learning makes future payoffs more uncertain, which induces the agents to decrease present exploitation due to the precautionary motive. Second, under heterogeneity of beliefs, there is a differential informational externality that induces the agents to increase or decrease present exploitation. We also perform a comparative analysis on the Cournot-Nash equilibrium with learning by studying the effect of optimism and riskiness on resource exploitation. (C) 2013 Elsevier Inc. All rights reserved.