Acceptable regulations to reduce common resource extraction∗

Regulating open access resources is welfare enhancing for society but not nec-essarily for all users. Some of them may, therefore, oppose regulation. We examine the short-term impact of common resource regulations under the political feasibil-ity constraint that no user should lose from free access extraction. We find that market-based instruments such as fees and subsidies or transferable quotas achieve a higher and more efficient reduction of resource extraction than non-transferable quotas. However, they exacerbate inequalities whereas quotas tend to reduce them