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Institutions influence preferences: Evidence from a common pool resource experiment

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  • Rodriguez-Sickert, Carlos
  • Guzmán, Ricardo Andrés
  • Cárdenas, Juan Camilo

Abstract

We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting our model to experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion. Low fines stabilize cooperation by preventing a spiral of negative reciprocation.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 67 (2008)
Issue (Month): 1 (July)
Pages: 215-227

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Handle: RePEc:eee:jeborg:v:67:y:2008:i:1:p:215-227

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References

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  1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
  2. Andreoni, J., 1993. "Cooperation in Public Goods Experiments: Kindness or Confusion?," Working papers 9309, Wisconsin Madison - Social Systems.
  3. Armin Falk & Michael Kosfeld, . "Distrust - The Hidden Cost of Control," IEW - Working Papers 193, Institute for Empirical Research in Economics - University of Zurich.
  4. Samuel Bowles & Herbert Gintis, 2001. "Social Capital and Community Governance," Working Papers 01-01-003, Santa Fe Institute.
  5. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  6. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
  7. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  8. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
  9. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
  10. Cardenas, Juan Camilo & Stranlund, John & Willis, Cleve, 2000. "Local Environmental Control and Institutional Crowding-Out," World Development, Elsevier, vol. 28(10), pages 1719-1733, October.
  11. Lin, Chung-cheng & Yang, C.C., 2006. "Fine enough or don't fine at all," Journal of Economic Behavior & Organization, Elsevier, vol. 59(2), pages 195-213, February.
  12. Samuel Bowles, 2007. "Social Preferences and Public Economics: Are good laws a substitute for good citizens?," Department of Economics University of Siena 496, Department of Economics, University of Siena.
  13. Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
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Citations

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Cited by:
  1. Anderies, John M. & Janssen, Marco A. & Bousquet, François & Cardenas, Juan-Camilo & Castillo, Daniel & Lopez, Maria-Claudio & Tobias, Robert & Vollan, Björn & Wutich, Amber, 2011. "The challenge of understanding decisions in experimental studies of common pool resource governance," Ecological Economics, Elsevier, vol. 70(9), pages 1571-1579, July.
  2. Samuel Bowles & Sandra Polanía Reyes, 2009. "Economic Incentives and Social Preferences: A preference-Based Lucas Critique of Public Policy," UMASS Amherst Economics Working Papers 2009-11, University of Massachusetts Amherst, Department of Economics.
  3. Felix Bierbrauer & Nick Netzer, 2012. "Mechanism Design and Intentions," Working Paper Series in Economics 53, University of Cologne, Department of Economics, revised 21 Aug 2012.
  4. Juan Camilo C�rdenas, 2009. "Experiments in Environment and Development," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 157-182, 09.
  5. Erik O. Kimbrough & Alexander Vostroknutov, 2013. "The Social and Ecological Determinants of Common Pool Resource Sustainability," Discussion Papers dp13-06, Department of Economics, Simon Fraser University.
  6. Jan Stoop & Charles N. Noussair & Daan van Soest, 2012. "From the Lab to the Field: Cooperation among Fishermen," Journal of Political Economy, University of Chicago Press, vol. 120(6), pages 1027 - 1056.
  7. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
  8. Kimbrough Erik O. & Vostroknutov Alexander, 2012. "Using Rules to Screen for Cooperative Types: Rule-Following and Restraint in Common Pool Resource Systems," Research Memorandum 055, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  9. Samuel Bowles & Sandra Polanía Reyes, 2009. "Economic Incentives and Social Preferences: A Preference-based Lucas Critique of Public Policy," CESifo Working Paper Series 2734, CESifo Group Munich.
  10. David Zetland & Marina Della Giusta, 2011. "Focal Points, Gender Norms and Reciprocation in Public Good Games," Economics & Management Discussion Papers em-dp2011-01, Henley Business School, Reading University.
  11. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
  12. Galinato, Gregmar I., 2011. "Endogenous property rights regimes, common-pool resources and trade," Ecological Economics, Elsevier, vol. 70(5), pages 951-962, March.
  13. José Santiago Arroyo Mina, 2012. "Dilemas sociales de la pesca en el pacífico colombiano: un análisis desde la teoría de juegos," REVISTA FACULTAD DE CIENCIAS ECONÓMICAS, UNIVERSIDAD MILITAR NUEVA GRANADA.
  14. Villena, Mauricio G. & Zecchetto, Franco, 2011. "Subject-specific performance information can worsen the tragedy of the commons: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 330-347, June.
  15. Coria, Jessica & Villegas-Palacio, Clara & Cárdenas, J.C., 2012. "Why Do Environmental Taxes Work Better in Developed Countries?," Working Papers in Economics 521, University of Gothenburg, Department of Economics.
  16. Janssen, Marco A. & Bousquet, François & Cardenas, Juan-Camilo & Castillo, Daniel & Worrapimphong, Kobchai, 2013. "Breaking the elected rules in a field experiment on forestry resources," Ecological Economics, Elsevier, vol. 90(C), pages 132-139.
  17. Narloch, Ulf & Pascual, Unai & Drucker, Adam G., 2012. "Collective Action Dynamics under External Rewards: Experimental Insights from Andean Farming Communities," World Development, Elsevier, vol. 40(10), pages 2096-2107.
  18. Juan Cardenas, 2011. "Social Norms and Behavior in the Local Commons as Seen Through the Lens of Field Experiments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(3), pages 451-485, March.
  19. d'Adda, Giovanna, 2011. "Motivation crowding in environmental protection: Evidence from an artefactual field experiment," Ecological Economics, Elsevier, vol. 70(11), pages 2083-2097, September.
  20. Cherry, Todd L. & Cotten, Stephen J. & Jones, Luke R., 2013. "The appropriation of endogenously provided common-pool resources," Resource and Energy Economics, Elsevier, vol. 35(3), pages 329-341.
  21. Samuel Bowles & Sandra Polania-Reyes, 2012. "Economic Incentives and Social Preferences: Substitutes or Complements?," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 368-425, June.

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