Does scarcity exacerbate the tragedy of the commons? Evidence from fishers’ experimental responses
AbstractEconomic Experimental Games (EEG) have challenged the theoretical prediction showing that individuals balance own and collective interests when making decisions that deviate away from suboptimal Nash equilibrium. However, few studies have analyzed whether these deviations from Nash equilibrium towards social optimum are affected as the stock of resource changes. Performing EEG with real fishers we test the hypothesis that behavior of participants –measured as relative deviations from Nash equilibrium- differs under a situation of abundance versus a situation of scarcity. The design of our EEG is based on a profit maximization model that incorporates intertemporal effects of aggregated extraction. Our findings show that in a situation of scarcity, players over extract the resource making decisions above the Nash equilibrium, obtaining less profit, mining the others-regarding interest, and exacerbating the tragedy of the commons. This result challenges previous general findings from the EEG literature. When individuals face abundance of the resource, however, they deviate downward from the individualistic and myopic behavior prediction. This phenomenon of private inefficient over exploitation is corrected when management strategies are introduced in the game, which underlines the importance of institutions.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6528.
Date of creation: 2008
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Other versions of this item:
- Maldonado, Jorge Higinio & Moreno-Sanchez, Rocio del Pilar, 2009. "Does Scarcity Exacerbate the Tragedy of the Commons? Evidence from Fishers’ Experimental Responses," Documentos CEDE Series 91170, Universidad de Los Andes, Economics Department.
- Jorge Higinio Maldonado & Rocío del Pilar Moreno-Sánchez, 2009. "Does Scarcity Exacerbate the Tragedy of the Commons? Evidence from Fishers’ Experimental Responses," DOCUMENTOS CEDE 006006, UNIVERSIDAD DE LOS ANDES-CEDE.
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-ENV-2008-11-18 (Environmental Economics)
- NEP-EXP-2008-11-18 (Experimental Economics)
- NEP-GTH-2008-11-18 (Game Theory)
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