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The Instability of the Nash Equilibrium in Common-Pool Resources

Listed author(s):
  • Tatsuyoshi Saijo

    (Kochi University of Technology)

  • Yutaka Kobayashi

    (Kochi University of Technology)

Efficient allocations in common-pool resources cannot be accomplished when appropriators are selfish. In addition to this dilemma, using a linear approximation of best response functions at the Nash equilibrium in the common-pool resource environment, we find that the system of simultaneous difference equations is locally unstable if the number of appropriators is at least four. This result indicates that the equilibrium analysis might not capture the essence of the common-pool resource problem, but provides an answer to ``some unexplained pulsing behavior'' (Ostrom, Journal of Economic Behavior and Organization, vol. 61, no.2 [2006], p. 150) of each appropriator's labor input in common-pool resource experiments.

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File URL: http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2014-5.pdf
File Function: First version, 2014
Download Restriction: no

Paper provided by Kochi University of Technology, School of Economics and Management in its series Working Papers with number SDES-2014-5.

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Length: 12 pages
Date of creation: Oct 2014
Date of revision: Oct 2014
Publication status: Published in SDE Series, October 2014, pages 1-12
Handle: RePEc:kch:wpaper:sdes-2014-5
Contact details of provider: Phone: 81-887572764
Fax: 81-887572124
Web page: http://www.souken.kochi-tech.ac.jp/seido/index.html

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  1. Rodriguez-Sickert, Carlos & Guzmán, Ricardo Andrés & Cárdenas, Juan Camilo, 2008. "Institutions influence preferences: Evidence from a common pool resource experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 215-227, July.
  2. Hayo, Bernd & Vollan, Björn, 2012. "Group interaction, heterogeneity, rules, and co-operative behaviour: Evidence from a common-pool resource experiment in South Africa and Namibia," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 9-28.
  3. Walker, James M. & Gardner, Roy & Ostrom, Elinor, 1990. "Rent dissipation in a limited-access common-pool resource: Experimental evidence," Journal of Environmental Economics and Management, Elsevier, vol. 19(3), pages 203-211, November.
  4. Ito, Masaru & Saijo, Tatsuyoshi & Une, Masashi, 1995. "The Tragedy of the Commons revisited Identifying behavioral principles," Journal of Economic Behavior & Organization, Elsevier, vol. 28(3), pages 311-335, December.
  5. Casari, Marco & Plott, Charles R., 2003. "Decentralized management of common property resources: experiments with a centuries-old institution," Journal of Economic Behavior & Organization, Elsevier, vol. 51(2), pages 217-247, June.
  6. Timothy Cason & Lata Gangadharan, 2015. "Promoting cooperation in nonlinear social dilemmas through peer punishment," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 66-88, March.
  7. Walker, James M & Gardner, Roy, 1992. "Probabilistic Destruction of Common-Pool Resources: Experimental Evidence," Economic Journal, Royal Economic Society, vol. 102(414), pages 1149-1161, September.
  8. Ostrom, Elinor, 2006. "The value-added of laboratory experiments for the study of institutions and common-pool resources," Journal of Economic Behavior & Organization, Elsevier, vol. 61(2), pages 149-163, October.
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