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Veto power and coalition formation in the commons: an experiment

Author

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  • Marc Willinger

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro - Montpellier SupAgro - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)

  • Oussama Rhouma

    (UJ - Université de Jendouba)

  • Klarizze Anne Puzon

    (UNU - United Nations University, Umeå University, Sweden)

Abstract

We propose a five-player common-pool resource (CPR) game with endogenous coalition formation. We show that the level of extraction from the CPR depends on the size of each coalition that is formed and on the final coalition structure. These predictions are tested in a laboratory experiment. We consider two treatments: dictator vs. veto. In the dictator treatment, at each stage of the coalition formation game, a randomly chosen player imposes the coalition size and selected members cannot refuse to become a member. In the veto treatment, players have the right to refuse joining the current coalition if they want to and make counter-proposals. We observe that the formation of the grand coalition is more frequent in the dictator treatment. However, with the repetition of the coalition formation game, the grand coalition becomes more frequent under both treatment, and past experience of a grand coalition increases the likelihood that the current coalition structure is the grand coalition. Finally, the possibility to form coalitions is beneficial at reducing CPR extractions, compared to the singleton structure, in both treatments.

Suggested Citation

  • Marc Willinger & Oussama Rhouma & Klarizze Anne Puzon, 2021. "Veto power and coalition formation in the commons: an experiment," Working Papers hal-03227335, HAL.
  • Handle: RePEc:hal:wpaper:hal-03227335
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03227335
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    References listed on IDEAS

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    More about this item

    Keywords

    coalition formation; laboratory experiment; veto power; common pool resource;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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