A GAME THEORETICAL PERSPECTIVE ON COMMON POOL RESOURCES: THE PROBLEM OF CENTRAL HEATING SYSTEM IN ROMANIA
A GAME THEORETICAL PERSPECTIVE ON COMMON POOL RESOURCES: THE PROBLEM OF CENTRAL HEATING SYSTEM IN ROMANIA

Summary/Abstract: This paper aims to develop a game theoretical model, which deals with the utility loss considering two institutional set-ups, i.e. central versus individual heating system. The general question we seek to address in this study is to what extent choosing one or the other alternative induces a more effective management of common pool resources and provides greater social benefits. Over the last few years, there has been a steady increase in the number of individual purchase of heating system. People have decided to give up the old and inefficient system and get independent from the point of view of warmth, water and gas consume. As the next table shows, the number of households connected to the centralized heating system decreases almost constantly every year, the exception being year 2003.

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