Subject-specific Performance Information can worsen the Tragedy of the Commons: Experimental Evidence
AbstractThe main aim of this article is to investigate the behavioral consequences of the provision of subject-specific information in the group effort levels chosen by players in an experimental CPR game. We examine two basic treatments, one with incomplete information and the other with complete information. In the former, subjects are informed only about their own individual payoffs and the aggregate extraction effort level of the group, and in the latter they are also informed about the individual effort levels and payoffs of each subject. Given this setting, the basic question we attempt to answer is: Will the provision of subject-specific performance information (i.e. individual’s effort levels and payoffs) improve or worsen the tragedy of the commons (i.e. an exploitation effort level greater than the socially optimum level)? In order to motivate our hypotheses and explain our experimental results at the individual level, we make use of the theory of learning in games, which goes beyond standard non-cooperative game theory, allowing us to explore the three basic benchmarks in the commons context: Nash equilibrium, Pareto efficient, and open access outcomes. We use several learning and imitation theoretical models that are based on contrasting assumptions about the level of rationality and the information available to subjects, namely: best response, imitate the average, mix of best response and imitate the average, imitate the best and follow the exemplary learning rules. Finally, in order to econometrically test the hypotheses formulated from the theoretical predictions we use a random-effects model to assess the explanatory power of the different selected behavioral learning and imitation rules.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27783.
Date of creation: 09 Jan 2010
Date of revision: 02 Dec 2010
Common Property Resources; Information; Learning and Imitation; Experimental Economics.;
Other versions of this item:
- Villena, Mauricio G. & Zecchetto, Franco, 2011. "Subject-specific performance information can worsen the tragedy of the commons: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 32(3), pages 330-347, June.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-16 (All new papers)
- NEP-CBE-2011-01-16 (Cognitive & Behavioural Economics)
- NEP-EVO-2011-01-16 (Evolutionary Economics)
- NEP-EXP-2011-01-16 (Experimental Economics)
- NEP-GTH-2011-01-16 (Game Theory)
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