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The Faustmann model as a model for a forestry of prices

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Abstract

The relation between the Faustmann model and “a forestry of prices” as a concept of thought was examined. At first, the meaning of the Faustmann model in economic sciences is the explanation of allocation and distribution by prices. The rotation age determination plays a secondary role only. Secondly, “a forestry of prices” as an application of the “free to choose” way of thinking is explained. The concept allows us to understand how individuals of anonymous groups achieve forest sustainability and provide forest environmental goods. Thirdly, the relation between the Faustmann model and “a forestry of prices” is discussed. For this purpose, the Faustmann model is described as a scientific laboratory. It helps us to observe how equilibrium arises as a non-intended result of individual welfare maximization in anonymous interactions. And conversely with the help of “a forestry of prices”, we understand also that the individual maximization approach of the Faustmann model re-enacts the unintended interaction situations in anonymous group. With help of the Faustmann model, we can understand deep aspects of “a forestry of prices”. Vice versa, “a forestry of prices” shows the meaning of the formal solutions of the Faustmann model.

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Notes

  1. With the “dilemma structure” Homann and Suchanek (2000), p. 35 pp) characterize the interaction of individuals with mutual and conflictive interests at the same time, so that mutual gains systematically fail. The concept of “dilemma structure” constitute economics.

  2. A discussion about the translation problem of the German term “Forsteinrichtung” is published in Hummel (1995), p. 288.

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Acknowledgments

The institute of forestry economics at the University of Freiburg is really a “free to think” place, where a lot of our ideas evolved. For the constructive critiques to an early version of this paper, we thank very much Chantal, Achim, Errol, Roderich, and all our friends at the seminar in the Mathislehuette in January 2008. Detailed comments came from Gerhard Oesten and Lars Liebig: Many thanks. Also we would like to thank the anonymous reviewer for the helpful comments.

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Authors and Affiliations

  1. Institut für Forstökonomie und Forsteinrichtung, TU Dresden, PF 1117, 01735, Tharandt, Germany

    Peter Deegen

  2. Cycad AG, Langmauerweg 12, 3011, Bern, Switzerland

    Martin Hostettler

  3. CATIE 7170, 30501, Cartago, Turrialba, Costa Rica

    Guillermo A. Navarro

Authors
  1. Peter Deegen
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  2. Martin Hostettler
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  3. Guillermo A. Navarro
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Correspondence to Peter Deegen.

Additional information

Communicated by M. Moog.

This is one in a series of articles dedicated to Prof. Dr. Dr. h.c. Gerhard Oesten on the occasion of his 60th birthday.

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Deegen, P., Hostettler, M. & Navarro, G.A. The Faustmann model as a model for a forestry of prices. Eur J Forest Res 130, 353–368 (2011). https://doi.org/10.1007/s10342-009-0336-9

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  • DOI: https://doi.org/10.1007/s10342-009-0336-9

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