Output Sharing Among Groups Exploiting Common Pool Resources
Many economic decisions are susceptible to either free-riding, or excessive rivalry or overextraction. Equally sharing output in partnerships introduces a free-riding incentive which may offset the latter. We conduct a laboratory experiment to assess the performance of output sharing in partnerships by introducing equal-sharing subgroups of size one, four and six into a twelve-person common pool resource (CPR) environment. Group members are either unchanging throughout a 15 period session (the partners treatment), or randomly reassigned each decision round (the strangers treatment). Group size significantly affects effort. Aggregate effort reflects the Nash equilibrium predictions. The first best solution is achieved when resource users are privately extracting from the CPR and equally sharing their output with the socially optimal number of partners. The strangers treatment does not significantly affect aggregate effort. Total payoff distribution, however, is more equitable for strangers than for partners.
|Date of creation:||May 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (905) 525-9140 ext. 22765
Fax: (905) 521-8232
Web page: http://www.mcmaster.ca/economics/Email:
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998.
"Voluntary Provision of Public Goods,"
McMaster Experimental Economics Laboratory Publications
1998-02, McMaster University.
- Brown, Gardner, Jr, 1974. "An Optimal Program for Managing Common Property Resources with Congestion Externalities," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 163-73, Jan.-Feb..
- Kenneth Chan & Stuart Mestelman & Robert Moir & R. Muller, 1999.
"Heterogeneity and the Voluntary Provision of Public Goods,"
Springer, vol. 2(1), pages 5-30, August.
- Kenneth S. Chan & Stuart Mestelman & Rob Moir & R. Andrew Muller, 1998. "Heterogeneity and the Voluntary Provision of Public Goods," Department of Economics Working Papers 1998-04, McMaster University.
- Hackett Steven & Schlager Edella & Walker James, 1994. "The Role of Communication in Resolving Commons Dilemmas: Experimental Evidence with Heterogeneous Appropriators," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 99-126, September.
- Farrell, Joseph & Scotchmer, Suzanne, 1988.
The Quarterly Journal of Economics,
MIT Press, vol. 103(2), pages 279-97, May.
- Farrell, Joseph & Scotchmer, Suzanne, 1986. "Partnerships," Department of Economics, Working Paper Series qt49d211x4, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Joseph Farrell and Suzanne Scotchmer., 1986. "Partnerships," Economics Working Papers 8616, University of California at Berkeley.
- Andreoni,J. & Croson,R., 1998.
"Partners versus strangers : random rematching in public goods experiments,"
11, Wisconsin Madison - Social Systems.
- Andreoni, James & Croson, Rachel, 2008. "Partners versus Strangers: Random Rematching in Public Goods Experiments," Handbook of Experimental Economics Results, Elsevier.
- James Andreoni & Rachel Croson, 2001. "Partners versus Strangers: Random Rematching in Public Goods Experiments," Levine's Working Paper Archive 563824000000000132, David K. Levine.
- Croson, Rachel T. A., 1996. "Partners and strangers revisited," Economics Letters, Elsevier, vol. 53(1), pages 25-32, October.
- Andereoni, J., 1988. "Why Free Ride? Strategies And Learning In Public Goods Experiments," Working papers 375, Wisconsin Madison - Social Systems.
- Stuart Mestelman, 2004.
"Partners and strangers in non-linear public goods environments,"
Department of Economics Working Papers
2004-02, McMaster University.
- Stuart Mestelman, 2004. "Partners and strangers in non-linear public goods environments," McMaster Experimental Economics Laboratory Publications 2004-02, McMaster University.
- Smith, Vernon L, 1985. "Experimental Economics: Reply," American Economic Review, American Economic Association, vol. 75(1), pages 264-72, March.
- Isaac, R Mark & Walker, James M, 1988. "Communication and Free-Riding Behavior: The Voluntary Contribution Mechanism," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 585-608, October.
- Andreoni, James, 1988. "Why free ride? : Strategies and learning in public goods experiments," Journal of Public Economics, Elsevier, vol. 37(3), pages 291-304, December.
- Parzival Copes, 1986. "A Critical Review of the Individual Quota as a Device in Fisheries Management," Land Economics, University of Wisconsin Press, vol. 62(3), pages 278-291.
When requesting a correction, please mention this item's handle: RePEc:mcm:mceelp:2004-05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.