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Institutions Influence Preferences: Evidence From A Common Pool Resource Experiment

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  • Carlos Rodríguez-Sickert

    ()

  • Ricardo Andrés Guzmán

    ()

  • Juan Camilo Cárdenas

    ()

Abstract

We model the dynamic effects of external enforcement on the exploitation of a common pool resource. Fitting our model to the results of experimental data we find that institutions influence social preferences. We solve two puzzles in the data: the increase and later erosion of cooperation when commoners vote against the imposition of a fine, and the high deterrence power of low fines. When fines are rejected, internalization of a social norm explains the increased cooperation; violations (accidental or not), coupled with reciprocal preferences, account for the erosion. Low fines stabilize cooperation by preventing a spiral of negative reciprocation.

Suggested Citation

  • Carlos Rodríguez-Sickert & Ricardo Andrés Guzmán & Juan Camilo Cárdenas, 2006. "Institutions Influence Preferences: Evidence From A Common Pool Resource Experiment," DOCUMENTOS CEDE 002890, UNIVERSIDAD DE LOS ANDES-CEDE.
  • Handle: RePEc:col:000089:002890
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    References listed on IDEAS

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    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
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    More about this item

    Keywords

    Field experiments; common pool resources; cooperation; enforcement; regulation; social preferences; social norms; learning models;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H4 - Public Economics - - Publicly Provided Goods
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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