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Does the Paradox of Plenty Exist? Experimental Evidence on the Curse of Resource Abundance

Listed author(s):
  • Andreas Leibbrandt
  • John Lynham

There is conflicting evidence about whether abundant resources are indeed a blessing or a curse. We make use of specially designed economic experiments to investigate how resource abundance affects cooperation in the absence or presence of regulatory institutions. We observe that in the absence of regulatory institutions, there is less cooperation in groups with access to large resource pools than in groups with access to small resource pools. However, if regulatory institutions are present, we show that there is more cooperation in groups with access to large resource pools than in groups with access to small resource pools. Our findings also reveal that resource users are more willing to regulate access to abundant than to small resource pools. These findings provide causal evidence for the “paradox of plenty” and identify the causes for the pitfalls and potentials of resource wealth.

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File URL: http://business.monash.edu/economics/research/publications/eco/0317paradoxleibbrandtlynham.pdf
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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 03-17.

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Length: 32 pages
Date of creation: Apr 2017
Handle: RePEc:mos:moswps:2017-03
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Department of Economics, Monash University, Victoria 3800, Australia

Phone: +61-3-9905-2493
Fax: +61-3-9905-5476
Web page: http://business.monash.edu/economics
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