Economic and political inequality in the management of socio-environmental problems

We designed and conducted an experiment of common-pool resource management involving economic and political inequality. Participants are assigned to different types differing in their endowments-Poor, Middle and Rich-and play an appropriation dilemma, with and without a voting procedure to select a quota limiting maximum extraction. Political inequality is introduced by allocating a higher likelihood to select the voted quota of a given player type: in the Ptochocracy treatment, the "Poor" type has a higher chance of setting her choice as quota; whereas in the Demarchy and Plutocracy treatments, this is true for the "Middle" and "Rich" types, respectively. These are contrasted with Democracy, where the votes of all three types are equally likely to be selected. Theoretically, each player type selfishly prefers the quota closer (i.e., one unit below) their endowment, although the lower quota would be socially desirable. We find that participants voted for the selfishly preferred quota between half and two-thirds of the time, and the introduction of these quotas decreased the absolute extraction in about 17.5%, even though participants were more likely to choose extraction levels closer to their maximum capacity (now set by the quota). Nonetheless, we do not find systematic differences in extraction patterns between treatments.