Linking Appropriation of Common Resources and Provision of Public Goods Decreases Rate of Destruction of the Commons
AbstractExperimental studies of common pool resource (CPR) dilemmas are frequently terminated with collapse of the resource; however, there is considerable evidence in real-world settings that challenge this finding. To reconcile this difference, we propose a two-stage model that links appropriation of the CPR and provision of public goods in an attempt to explain the emergence of cooperation in the management of CPRs under environmental uncertainty. Benchmark predictions are derived from the model, and subsequently tested experimentally under different marginal cost-benefit structures concerning the voluntary contribution to the provision of the good. Our results suggest that the severity of the appropriation problem is significantly mitigated by the presence of an option for voluntarily contributing a fraction of the income surplus from the appropriation phase to the provision of the public good.
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Bibliographic InfoPaper provided by Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho in its series NIMA Working Papers with number 50.
Length: 25 pages
Date of creation: Apr 2013
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-11 (All new papers)
- NEP-CBE-2013-05-11 (Cognitive & Behavioural Economics)
- NEP-ENV-2013-05-11 (Environmental Economics)
- NEP-EXP-2013-05-11 (Experimental Economics)
- NEP-PUB-2013-05-11 (Public Finance)
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