The Efficiency of Direct Public Involvement in Environmental Policymaking: An Experimental Test
AbstractIn one of the most ambitious forms of environmental decision-making, representatives of interested parties – environmentalists, developers, farmers, loggers, miners, etc. - are charged with the responsibility of developing a set of public policies that is acceptable to all of them. Although this approach has become increasingly popular, and has been widely discussed in the academic literature, little is known about the characteristics of the outcomes that are reached in this type of negotiation. We do not know, for example, whether these outcomes meet the standard criteria for efficiency or equity. In this paper, we use laboratory experiments to test whether a number of axiomatic models of bargaining can predict the behavior of the parties to environmental decision making. In recognition of the multi-dimensional aspect of most public land use conflicts, we ask pairs of subjects to negotiate over two goods, without the possibility of cash side payments. We thus provide one of the first experimental tests of a prediction associated with the Edgeworth Box: that parties with an initial endowment that is Pareto inefficient will make trades until they reach a Pareto efficient allocation. We further test whether parties in particular reach the Nash bargain when it coincides with or conflicts with outcomes that maximise the parties’ joint payoffs and with outcomes at which the parties’ receive equal payoffs. Finally, the effect of providing parties with full or partial information regarding payoffs is also examined.
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Bibliographic InfoPaper provided by University of Canterbury, Department of Economics and Finance in its series Working Papers in Economics with number 08/08.
Length: 35 pages
Date of creation: 05 May 2008
Date of revision:
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Axiomatic models of bargaining; Experimental tests; Land use conflicts; Collaborative policymaking;
Other versions of this item:
- Christopher Bruce & Jeremy Clark, 2010. "The Efficiency of Direct Public Involvement in Environmental Policymaking: An Experimental Test," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(2), pages 157-182, February.
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-06-13 (Agricultural Economics)
- NEP-ALL-2008-06-13 (All new papers)
- NEP-CDM-2008-06-13 (Collective Decision-Making)
- NEP-ENV-2008-06-13 (Environmental Economics)
- NEP-EXP-2008-06-13 (Experimental Economics)
- NEP-PBE-2008-06-13 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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