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The Endogenous Formation of Common Pool Resource Coalitions

Author

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  • Carlos A. Chávez

    (Universidad de Talca)

  • James J. Murphy

    (Department of Economics, University of Alaska Anchorage)

  • Felipe J. Quezada

    (University of Massachusetts Amherst)

  • John K. Stranlund

    (University of Massachusetts Amherst)

Abstract

We develop a theoretical model of endogenous CPR coalition formation in which the resource is co-defended with costly monitoring by coalition members and sanctions for encroachment imposed by the government. We demonstrate that CPR coalitions can form even when monitoring is so costly that coalition members choose not to monitor for encroachment, but the coalitions will be relatively small. Larger coalitions will form if monitoring costs are low enough to yield effective deterrence. We tested the results of the model using lab-in-field experiments with fishers who were members of Chile’s territorial use rights fisheries (TURFs) and in the lab with Chilean university students. We find that fishers frequently formed CPR coalitions, even when they could not deter outsider poaching. Fishers usually formed the grand coalition when the monitoring cost was low, but they formed smaller coalitions when monitoring was more costly. Fishers invested in monitoring frequently and these investments reduced poaching. Relative to open access, when coalitions formed, total harvest effort was curtailed and earnings for coalition members generally increased. Students formed coalitions less frequently, these coalitions tended to be small, and they infrequently invested in monitoring, even when it was profitable to do so. Consequently, student coalition member earnings were not better off on average than under open access.

Suggested Citation

  • Carlos A. Chávez & James J. Murphy & Felipe J. Quezada & John K. Stranlund, 2021. "The Endogenous Formation of Common Pool Resource Coalitions," Working Papers 2021-01, University of Alaska Anchorage, Department of Economics.
  • Handle: RePEc:ala:wpaper:2021-01
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    More about this item

    Keywords

    experimental economics; Common pool resources; enforcement; field experiments; poaching; territorial use rights fisheries; social dilemma; fisheries management; development economics; co-enforcement; coalition formation; encroachment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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