Bargaining to preserve a unique ecosystem: the role of anticipatory investments to establish stronger bargaining positions

A forester and a conservation organization bargain over the commercial expl oitation or preservation of a forested tract of land with unique ecological characteristics. The forester can improve its bargaining position by prepa ring a portion of the land for future timber production prior to negotiatio ns between the two. However, doing so decreases the preservation Value of t he forest, as well as the compensation the conservation group is willing- t o pay to preserve the forest. The analysis suggests that the forester will begin preparing the land for timber production prior to negotiations only w hen the value of the land in timber production is significantly lower than the preservation values of the conservation group. (C) 1999 Elsevier Scienc e B.V. All rights reserved. JEL classification: D62; Q20.