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Cooperation in the Commons with Unobservable Actions

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Author Info

  • Nori Tarui

    ()
    (Department of Economics, University of Hawaii at Manoa)

  • Charles Mason

    ()
    (Department of Economics and Finance, University of Wyoming)

  • Stephen Polasky

    ()
    (Department of Applied Economics, University of Minnesota)

  • Greg Ellis

    ()
    (Department of Economics, University of Washington)

Abstract

We model a dynamic common property resource game with unobservable actions and non-linear stock dependent costs. We propose a strategy profile that generates a worst perfect equilibrium in the punishment phase, thereby supporting cooperation under the widest set of conditions. We show under what set of parameter values for the discount rate, resource growth rate, harvest price, and the number of resource users, this strategy supports cooperation in the commons as a subgame perfect equilibrium. The strategy profile that we propose, which involves harsh punishment after a defection followed by forgiveness, is consistent with human behavior observed in experiments and common property resource case studies.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_07-11.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200711.

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Length: 32 pages
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:hai:wpaper:200711

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Keywords: Common property resource; cooperation; dynamic game; unobservable actions;

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References

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Citations

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Cited by:
  1. Salant, Stephen W. & Kotchen, Matthew J., 2009. "A Free Lunch in the Commons," Discussion Papers dp-09-30, Resources For the Future.
  2. Encarna Esteban & Ariel Dinar, 2013. "Cooperative Management of Groundwater Resources in the Presence of Environmental Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(3), pages 443-469, March.
  3. Antoniadou, Elena & Koulovatianos, Christos & Mirman, Leonard J., 2013. "Strategic exploitation of a common-property resource under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 28-39.
  4. Michael Finus & Pedro Pintassilgo & Marko Lindroos & Gordon Munro, 2008. "Stability and Success of Regional Fisheries Management Organizations," Working Papers 2008.20, Fondazione Eni Enrico Mattei.
  5. Patel, Amrish & Cartwright, Edward & Mark, Van Vugt, 2010. "Punishment Cannot Sustain Cooperation in a Public Good Game with Free-Rider Anonymity," Working Papers in Economics 451, University of Gothenburg, Department of Economics.
  6. Alessandro Tavoni & Maja Schlüter & Simon Levin, 2011. "The survival of the conformist: social pressure and renewable resource management," Grantham Research Institute on Climate Change and the Environment Working Papers 35, Grantham Research Institute on Climate Change and the Environment.
  7. Michael Finus & Raoul Schneider & Pedro Pintassilgo, 2011. "The Incentive Structure of Impure Public Good Provision – The Case of International Fisheries," Discussion Papers 1103, Exeter University, Department of Economics.
  8. Blanco, Ester & Lozano, Javier & Rey-Maquieira, Javier, 2009. "A dynamic approach to voluntary environmental contributions in tourism," Ecological Economics, Elsevier, vol. 69(1), pages 104-114, November.
  9. Emilio Calvo & Santiago J. Rubio, 2012. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," Discussion Papers in Economic Behaviour 0112, University of Valencia, ERI-CES.
  10. Steven J. Lade & Alessandro Tavoni & Simon A. Levin & Maja Schlüter, 2013. "Regime shifts in a social-ecological system," Grantham Research Institute on Climate Change and the Environment Working Papers 105, Grantham Research Institute on Climate Change and the Environment.
  11. Alessandro Tavoni & Maja Schlüter & Simon Levin, 2011. "The survival of the conformist: social pressure and renewable resource management," LSE Research Online Documents on Economics 37571, London School of Economics and Political Science, LSE Library.

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