Coordination problems and resource collapse in the commons — Exploring the role of knowledge heterogeneity

The role of environmental uncertainty has not been ignored in the common resource literature, but underlying most of this research is an explicit or implicit assumption of symmetric uncertainty. In this paper I relax the assumption of symmetric uncertainty and analyze how knowledge heterogeneity influences coordination problems that can arise in common resource settings. This paper demonstrates that knowledge heterogeneity can work as a coordination device; the more users differ with respect to knowledge, the smaller is the coordination problem as well as the probability of resource breakdown. Less informed users can take advantage of their ignorance at the expense of more informed users. Furthermore, regulation can reduce the coordination problem further, but only by reinforcing the benefit from ignorance. Thus when analyzing and suggesting policies for reducing the inefficiencies associated with common resources where rivalry prevails, one should not only be concerned about the level of environmental uncertainty, but also the distribution, as it matters too.