Grassland Grazing Contracts and Degradation: Relationship and Mechanism
Is there some relation between the degradation and grazing institution? This paper attempts to find internal mechanism among the institution, herdsman behavior and degradation. The behavior of herdsman once was analyzed in private property of grassland, although once opposed. A grazing contract model under uncertainty was built, with which the herding behavior was checked. To analyze the relationship and mechanism between contracts characteristics and grassland degradation, the relation between and different risk preferences were studied under the decentralized equilibrium of the contract through setting the different parameters to show the basic characteristics of the grazing contract. We reach the following conclusions: the risk preferences of the type of pastoral are important to grassland degradation. The fact means the party to a contract is risk-neutral and will lead to overgrazation. Grassland degradation will arise in some situation expected utility maximization, even when both parties are risk averse. The conclusion is similar Elinor Ostrom’s points in 1990 that private property rights of grasslands may not the only, even not the best solution.
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