Jorgensen, SteffenSteffenJorgensenProf. YEUNG Wing Kay, DavidDavidProf. YEUNG Wing Kay2021-03-062021-03-062001International Journal of Mathematics, Game Theory, and Algebra, 2001, vol. 11(5), pp. 45-64.1060-9881http://hdl.handle.net/20.500.11861/6504In this paper, we present an institutional structure for a cooperative intergeneration game of resource extraction. The government plays the role of an arbitrator and acts as a proxy for unborn individuals. Then we formulate an intergenerational equity rule for renewable resource extraction which maximizes recurrent resource rent and satisfies Solow's (1986, p.143) welfare criterion that each generation is as well off as any other generations. We designate the rule as the Maximum Recurrent Rent (MRR) Rule. One of the most thorny issues in the debate on intergenerational equity is the absence of an implementation scheme that would be incentive compatible for rational agents. Here we show that the MRR rule can be implemented with an incentive scheme which includes a state-dependent reward, an extraction levy and an entry fee. Given this incentive scheme the maximum amount of recurrent resource rent can be achieved by rational behaviour of the extractors.enCooperative GameMaximum Recurrent Rent RulePeer Reviewed Journal Article