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Communication and Output Sharing in Common Pool Resource Environments

Author

Listed:
  • Neil J. Buckley
  • Stuart Mestelman
  • R. Andrew Muller
  • Stephan Schott
  • Jingjing Zhang

Abstract

We study cheap-talk communication in common pool resource environments with and without output-sharing groups. Communication in groups of 12 does not improve efficiency over the non-cooperative Nash outcome without communication. Organizing subjects into output-sharing groups of four players introduces sufficient free-riding incentives to achieve full efficiency. Within-group communication decreases efficiency by countervailing the free-riding incentives induced by output sharing and enhancing between-group competition. The effects are stronger when output-sharing groups have repeated fixed membership. Adding public communication reduces the efficiency-reducing effects of within-group communication. Restricting private communication within social groups that do not share output increases efficiency to almost 100%.

Suggested Citation

  • Neil J. Buckley & Stuart Mestelman & R. Andrew Muller & Stephan Schott & Jingjing Zhang, 2013. "Communication and Output Sharing in Common Pool Resource Environments," Department of Economics Working Papers 2013-06, McMaster University.
    • Handle: RePEc:mcm:deptwp:2013-06
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    More about this item

    Keywords

    Common pool resources; communication; competition; group behavior; partners and strangers; experiments;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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