Tragedy of the common canal
AbstractThis paper uses laboratory experiments to investigate the effects of alternative solutions to a common-pool resource with a unidirectional flow. The focus is on the comparative economic efficiency of communications, bilateral “Coasian” bargaining, auctions and price-based allocations. All treatments improve allocative efficiency relative to a baseline environment. Communication and bilateral bargaining are not generally as effective as market allocations. An exogenously imposed, optimal fee results in the greatest efficiency gain, followed by auction allocations that determine the usage fee endogenously.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 20838.
Date of creation: 19 Feb 2010
Date of revision:
externalities; experiments; auctions; Coasian bargaining; common pool resource;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-06 (All new papers)
- NEP-CBE-2010-03-06 (Cognitive & Behavioural Economics)
- NEP-EXP-2010-03-06 (Experimental Economics)
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