Technology Externalities

A technology externality results from the presence of heterogeneous harvesters within a CPR. When competing technologies are used to harvest the same resource, the rate of extraction per a unit of effort will vary across different technological choices. When the rate of extraction for one form of technology exceeds that of another form it will cause a negative externality by reducing the available harvest of another. In addition, when technological choices conflict technically or geographically external costs are incurred that are not internalized by the harvesting agent. This induces a technological externality. The presence of heterogeneous technology introduces a technology externality whenever the choice of technology has either a positive or negative effect on the potential harvest of other participants within the CPR.