Navigating Social Dilemmas in Forest Resource Management

Social dilemmas happen when the members of a group, culture, or society are in possible conflict over the establishment and use of shared “public goods”. Public goods are benefits that are shared by a community and that everyone has access to, regardless of whether they have personally contributed to the creation of the goods. In some instances, the public good involves the liable use of a resource that if used properly by the group will remain intact but if overused will be destroyed. Examples include the fishing off the coast of the Olympic Peninsula and wildlife food supply, damming local waterways, and the pollution of water and air. In other instances, the public good involves a service, such as public radio, that is supported by the members of the community but that is used freely by everyone in the community. (Stangor)

The social dilemma I’d like to take a look into is the use and acquisition of natural resources, particularly our forested lands. There are many ways to use our forest, like hiking, cycling, fishing, hunting, and probably the biggest use in the last 150 year has been logging. Our forest provides clear air, fresh drinking water, beautiful landscapes, materials to build homes, etc., and there is a lot of money to be made in the logging industry. In the early stages of colonization and westward expansion, there was virtually no regulations on timber producers and the forest were seen as an endless resource. The social dilemma that occurs here is who gets to take what and how much gets to be taken. (If the next part of this essay is hard to understand, I’d be more than happy to go into greater detail in person.)

For this situation I’m going to make up two fictional logging companies to be represented, with their own specific product their qualified to produce efficiently. The first company is Ursa Major Timber Products, a small milling operation who specializes in smaller scale, valuable hardwoods (Cheery, walnut, Beech, etc.) The second company is Adams Logging Co., who specializes in larger scale logging operations with a higher output in generic wood (Lodgepole, Ponderosa, Cedar, etc.) Each company is given thinning contracts from the United States Forest Service to cut a certain amount of wood per acre in the Olympic National Forest.

Hardwoods Pines

Hardwoods -Both choose to log hardwoods: There is a Price glut.

• -There is a shortage pine lumber in the market.
• -Adams produces hardwoods at a less efficient rate. -Both companies producing wood products they’re less suite for.
• -Price goes up for both

Pines -High prices on both

• -Both companies producing the wood product they’re best suited for -Both produce pine lumber
• -Price glut ensues
• -Ursa Major not producing valuable hardwoods like its suited to do

Hardwoods Pines

• Hardwoods Ursa Major gets 4
• Adams gets 1 Ursa Major gets 2
• Adams gets 2
• Pines Ursa Major gets 4
• Adams gets 4 Ursa Major gets 1
• Adams gets 4

For the payoff table, I set it ranging from 1 to 4, 1 being the lowest and 4 being the highest. 1 means that the producer is producing wood products at an inefficient rate and receiving a lower price for those goods. 4 would be the opposite of that where the producer is at max efficiency and receiving top value for their products. The market price drops when it is overwhelmed with on type of wood product, both companies will do better if they decide to specialize then when they try to both produce the same product. The mutually preferred outcome would be for them to produce different wood products, and they will both do better if each company specialized in the wood product that they are most efficient at producing.

Thankfully there is an easy way to solve this social dilemma in the real world. Each company wants to maximize profit while minimizing the cost that goes into their product. If a company specializes in a certain product, they should stick to producing that one product. There is the aspect of growth though, where a company could see an opportunity to expand their business into a new market potentially increasing revenue. In the situation mentioned above, both companies could do research on other mills in the area to see what they specialize in. It wouldn’t make sense for the smaller Ursa Major operation to pick up large scale logging when they specialize in small scale, valuable hardwoods where one of their walnut trees could be worth ten times what a standard lodgepole pine would be worth.

Bibliography

1. “Stangor, Charles. “Principles of Social Psychology – 1st International Edition.” Principles of Social Psychology 1st International Edition, BCcampus, 26 Sept. 2014, opentextbc.ca/socialpsychology/chapter/how-the-social-situation-creates-conflict-the-role-of-social-dilemmas/.”
2. ““Unit 4 Social Interactions.” The Economy, core-econ.org/the-economy/book/text/04.html#42-equilibrium-in-the-invisible-hand-game.”