“…Our model is related to the literature on self-protection strategies adopted by economic agents to defend themselves against the consequences of environmental degradation (see, e.g., Hirsch, 1976;Hueting 1980;Shibata and Winrich, 1983;Bird, 1987;Leipert and Simonis, 1988;Shogren and Crocker, 1991;Yongguan et al, 2001;López, 2003;Escofet and Bravo-Peña, 2007). In the case in which there is no coordination among economic agents, self-protection strategies may give rise to socially undesirable outcomes.…”