Expected Payoffs under the Social Planner, Noncooperative, and Cooperative Solutions
| Expected Payoffsa (thousands of dollars/acre over 50 years) | ||||||
|---|---|---|---|---|---|---|
| Strategy (GH, GL) | Payoff to GH | Payoff to GL | Total Payoff | Surplusb | Cooperative Payoff to GH | Cooperative Payoff to GL |
| Social planner solution (ImNS, ImNS) | 91 (3)c | 31 (5) | 122 | N/A | N/A | N/A |
| Cooperative solution (ImNS, ImNS) | 91 (3) | 31 (5) | 122 | 40*** | 80 | 42 |
| Simultaneous game or sequential game, GL moves first (No control, No control) | 60 (3) | 22 (1) | 82 | N/A | N/A | N/A |
| Sequential game, GH moves first (ImNS, ImNS) | 91 (3) | 31 (5) | 122 | N/A | N/A | N/A |
Note: N/A, not applicable.
↵a Expectations are obtained from 1,000 simulations; payoffs are computed for the baseline prices pH = $3,058/ton and pL = $766/ton.
↵b Cooperative surplus = Total payoff (Cooperative) – Total payoff (Noncooperative).
↵c Standard deviations in parentheses.
↵*** Statistically significant at the 1% level.