Shallow lake economics run deep: nonlinear aspects of an economic‐ecological interest conflict

Outcomes of the shallow lake long‐term interest conflict in a number of different settings are presented, in particular in the contexts of quasi‐static and dynamic social planning and of quasi‐static non‐cooperative play. Also the effect of trigger strategies in repeated quasi‐static play is analysed. A characteristic feature of these interest conflicts, and of pollution problems in general, is the qualitative dichotomy in possible outcomes: the lake (or the ecosystem, or the climate) ends up in either a clean or in a polluted state, both of which, if attained, is stabilised by some kind of feedback mechanism. The social choice therefore always incorporates a qualitative aspect: the decision maker has to decide for or against production, for or against conserving the ecosystem.