The challenge of understanding decisions in experimental studies of common pool resource governance

Common pool resource experiments in the laboratory and the field have provided insights that have contrasted to those derived from conventional non-cooperative game theory. Contrary to predictions from non-cooperative game theory, participants are sometimes willing to restrain voluntarily from over extracting resources and use costly punishment to sanction other participants. Something as simple as face-to-face communication has been shown to increase average earnings significantly. In the next generation of experiments, both in the laboratory and in the field, we need to extract more information that provides insight concerning why people make the decisions they make. More information is needed concerning attributes of individuals as well as the social and social-ecological context in which they interact that may give rise to such deviations from theoretical predictions. In the process of extracting more information from participants and the contexts in which they interact, we face several methodological and ethical challenges which we address in this paper.     

Output sharing in partnerships as a common pool resource management instrument

Many economic environments are susceptible to either free-riding or overuse. Common pool resources (CPRs) fall in the latter category. Equally sharing the output of a CPR in partnerships introduces a free-riding incentive that may offset overuse. Socially optimal harvesting can be induced by dividing the set of resource users into a number of partnerships in such a way that each resource users’ tendency to over-harvest from the resource is exactly offset by his or her tendency to free-ride on the contributions of others. We conduct a laboratory experiment to assess the performance of this partnership solution by introducing equal-sharing subgroups of size one, four and six into a twelve-person CPR environment. Group assignment is either unchanging throughout a 15 period session or randomly mixed each decision round. Group size significantly affects aggregate effort, while group assignment makes no significant difference. The distribution of total payoffs is more equitable for randomly mixed groups. Implications of our results for voluntary and centralized implementations of the partnership solution are discussed.

Common property, information, and cooperation: Commercial fishing in the Bering Sea

A substantial theoretical and experimental literature has focused on the conditions under which cooperative behavior among actors providing public goods or extracting common-pool resources arises. The literature identifies the importance of coercion, small groups of actors, or the existence of social norms as conducive to cooperation. This research empirically investigates cooperative behavior in a natural resource extraction industry in which the provision of a public good (bycatch avoidance) in the Alaskan flatfish fishery is essential to the duration of the fishing season, and an information provision mechanism exists to relay information to all individuals. Using a mixed logit model of spatial fishing behavior our results show that conditionally cooperative behavior is prevalent but deteriorates as bycatch constraints tighten.     

Head-enders as stationary bandits in asymmetric commons: Comparing irrigation experiments in the laboratory and the field

The emergence of large-scale irrigation systems has puzzled generations of social scientists, since they are particularly vulnerable to selfish rational actors who might exploit inherent asymmetries in the system (e.g. simply being the head-ender) or who might free ride on the provision of public infrastructure. As part of two related research projects that focus on how subtle social and environmental contextual variables affect the evolution and performance of institutional rules, several sets of experiments have been performed in laboratory settings at Arizona State University and in field settings in rural villages in Thailand and Colombia. In these experiments, participants make both a decision about how much to invest in public infrastructure and how much to extract from the resources generated by that public infrastructure. With both studies we find that head-enders act as stationary bandits. They do take unequal shares of the common-pool resource but if their share is very large relative to downstream participants' shares, the latter will revolt. Therefore for groups to be successful, head-enders must restrain themselves in their use of their privileged access to the common-pool resource. The comparative approach shows that this result is robust across different social and ecological contexts.     

Dissertation abstract: Three essays on the determinants of behavior in the commons-experimental evidence from fishing communities in Colombia

This dissertation presents the results of a series of common pool experiments conducted in three regions of rural Colombia with individuals who face a social dilemma in their everyday lives that is similar to what was presented in the experiment. The research objectives are to develop an empirical characterization of how individual behavior deviates from purely self-interested Nash behavior and to further our understanding of the effects of alternative institutions to promote more conservative choices in common pool experiments.Groups of five subjects participated in a 20-period common pool resource game framed as a harvest decision from a fishery. Every group first played 10 rounds of a baseline limited access common pool resource game and then 10 additional rounds under one of five institutions: face-to-face communication, one of two external regulations, and communication combined with one of the two regulations. The two external regulations consisted of an individual harvest quota that was set at the efficient outcome, but differ with respect to the level of enforcement. A total of 420 individuals participated in the experiments, with individual earnings averaging slightly more than a day’s wages. The results are presented in three essays.The first essay, What Motivates Common Pool Resource Users?, develops and tests several models of pure Nash strategies of individuals who extract from a common pool resource when they are motivated by combinations of self-interest, altruism, reciprocity, inequity aversion or conformity. The results suggest that a model which balances self-interest with a strong preference for conformity best describes average strategies. The data are inconsistent with a model of pure self-interest, as well as models that combine self-interest with individual preferences for altruism, reciprocity and inequity aversion.The second essay, Communication and Regulation to Conserve Common Pool Resources, tests for interaction effects between formal regulations imposed on a community to conserve a local natural resource and non-binding verbal agreements to do the same. The results indicate that formal regulations and informal communication are mutually reinforcing in some instances, but this result is not robust across regions or regulations. Therefore, the hypothesis of a complementary relationship of formal and informal control of local natural resources cannot be supported in general; instead the effects are likely to be community-specific. There is some evidence to suggest that these effects are correlated with the relative importance of formal regulations versus informal community efforts in the community.The third essay, Within and Between Group Variation in Individual Strategies in Common Pools, analyzes the relative effects of groups and individuals within groups in explaining variation in individual harvest decisions for particular institutions, and uses a hierarchical linear model to examine how these sources of variation may vary across institutions. Communication serves to effectively coordinate individual strategies within groups, but these coordinated strategies vary considerably among groups. In contrast, externally-imposed regulatory schemes (as well as unregulated limited access) produce significant variation in the individual strategies within groups, but these strategies are roughly replicated across groups so that there is little between-group variation.     

The participation decision versus the level of participation in an environmental treaty: a spatial probit analysis

This paper represents treaty participation as a two-stage game, for which nations first decide whether or not to participate and then they choose their level of participation. The resulting subgame perfect equilibrium is used to derive a reduced-form equation for estimating and separating the influences of the variables at the two decision stages. This spatial probit equation forms the basis for a full-information maximum likelihood estimator that accounts for the simultaneity bias associated with public good spillins at both stages. When the procedure is applied to the Helsinki Protocol, we find that the strategic influence of a variable may drastically differ depending upon which stage is scrutinized.     

Optimal exporting of exhaustible resources with endogenous trade revenue: The case of a resource-scarce and capital-short economy

This paper discusses a dynamic trade problem of a resource-scarce and capital-short open economy. In this economy, exhaustible resources are traded for foreign capital. Different from previous research on similar topics, the models in this paper allows for endogenous export revenue. The optimal trade behavior of the economy is discussed here. The efficiency conditions for the optimal trading under various assumptions are derived. These conditions correspond to the noted Hotelling rules in a closed economy. Finally, policy implications of the results are presented.     

Study on security and protection of original ecotourism resources in the mountain areas of western Guangxi

Original ecotourism resources mainly refer to natural and human original ecotourism resources, and it＇s of fragility, rarity and irreversibility. As a valuable historic heritage and hnportant tourism resources, it plays a significant role in developing tourism and economy in such areas as the underdeveloped areas, the mountain areas and mimority areas. The tourism resources in the western mountain areas of Guangxi owe ,superiorities and characteristics ＇o their original ecology, Yet, western Guangxi is an ethnic region with fragile karst eco-environment, so it is specialto exploit the tourism resources. The paper defines original eeotourism and analyses the specialties and advantages of the original ecotourism resources as well as thefrailty of the ecotourism resources of the region. The ways of thinking are put forward for safe preservation and sustainable development of the original ecotourism resources, i.e. carrying out measures for the multi-grade protection of heritage resources, setting up a ethnic eco-museum/ ethnic culture eco-park and a gene pool of ethnic cultures, etc.     

Applying for social programs in India: Roles of local politics and caste networks in affirmative action

India has among the most extensive affirmative action programs in the world. Depending on the State, up to 50% of jobs in the public sector are reserved for members of low castes. However, recruitment is highly discretionary, making it hard for low castes without connections to access reserved jobs and thereby benefit from affirmative action. This paper studies how having a local elected leader from the same caste affects the probability of applying for reserved jobs. The identification strategy focuses on the political reservation system at the village level that determines the caste group of the local elected leader. Taking data from three States in South India, I find that households are more likely to apply when the local elected leader is from their caste group. The evidence suggests that the impact is driven by updated beliefs regarding the probability of a successful application.     

Widowhood and health of elderly in India: examining the role of economic factors using structural equation modeling

Evidence on the association between widowhood and health is widely available in the literature. However, there is a dearth of analysis on the mechanism through which widowhood affects the health status of an individual, particularly in old age, specifically whether widowhood among the elderly affects their health through their economic conditions. This paper purports to establish both the direct and indirect effects of widowhood on self-reported health status among aged Indians. We examine the mediating effect of economic factors such as income, labor force participation, extent of economic independence and other economic factors in the relationship between widowhood and health status. Structural Equation Modeling (SEM) is employed to test specific hypotheses. We use unit level 60th round data for the year 2004 surveyed by the National Sample Survey Organization (NSSO). The results confirm that poor economic conditions have a mediating effect on the relationship between widowhood and health and, therefore, any policy to reduce the effect of widowhood on health must be based on economic factors.     

Further development and sustainable utilization mode of grassland tourism resources: a case study of Inner Mongolia Autonomous Region, China

Tourism resources are important foundation for the development of tourism industry. Grassland is not only a kind of important resource but also a great attraction to visitors. Therefore, the integrated development and sustainable utilization of grassland tourism resources are of great significance. This paper, based on the analysis of literatures and the current problems existing in grassland tourism, summarizes the speciality of grassland tourism development, deals with the problem of speciality, and raises the modes of regional development, product development and management. This paper takes Inner Mongolia, the famous grassland tourism destination as example and carries out empirical research. Based on the status quo of grassland tourism resources in Inner Mongolia, this study analyzes the character- istics of grassland tourism resources, the necessity and feasibility of integrated development, then proposes the following suggestions: idea for development, mode of development, regional cooperation, tourism products development, espe- cially the three modes of development based on the resources conditions - the mode of relying on market, the mode of combination aggregation and the mode of relying on quality.     

Further development and sustainable utilization mode of grassland tourism resources： a ease study of Inner Mongolia Autonomous Region, China

Tourism resources are important foundation for the development of tourism industry.Grassland is not only a kind of important resource but also a great attraction to visitors.Therefore,the integrated development and sustainable utilization of grassland tourism resources are of great significance.This paper,based on the analysis of literatures and the current problems existing in grassland tourism,summarizes the speciality of grassland tourism development,deals nation as example and carries out empirical research.Based on the status quo of grassland tourism resources in Inner Mongolia,this study analyzes the characteristics of grassland tourism resources,the necessity and feasibility of integrated development,then proposes the following suggestions： idea for development,mode of development,regional cooperation,tourism products development,especially the three modes of development based on the resources conditions - the mode of relying on market,the mode of combination aggregation and the mode of relying on quality.     

Development of internal resources and capabilities as sources of differentiation of SME under increased global competition: A field study in Mexico

This paper draws on the resource-based view of the firm and contributes to our understanding of how the development of internal resources and capabilities in SMEs can provide sources of competitive advantages in the international arena and improve their business performance.This research found statistical evidence to suggest that business performance measured by growth rate, efficiency, productivity and shareholder's financial returns, is positively related with the development of internal capabilities such as soft technology (methods and processes that support the firm) and hard technology (externally acquired equipment, in-house development of machinery and innovation in raw materials) and a strategy of continuous improvement, innovation and change.A number of relevant contributions are proposed in this piece of research that expands our understanding of how SMEs can compete in the international context: (1) firms whose explicit business strategy emphasizes innovation and knowledge creation have been able to successfully participate in global contexts; (2) even though financial resources are important for a firm to leverage performance it was found that development of internal capabilities has been more important than limited financial resources in order to develop competitive advantages to compete with larger and multinational competitors; (3) results of this research support the proposition that from an associational economy perspective the development of a geographical region or country should be an interaction among a number of constituents namely government policies, the firms themselves and universities and research centers among others.     

Evaluating the effects of area closure for recreational fishing in a coral reef ecosystem: The benefits of an integrated economic and biophysical modeling

This paper presents an integrated agent-based model of recreational fishing behavior within a reef ecosystem as a platform for the evaluation of recreational fishing management strategies. Angler behavior is described using econometrically estimated site choice models, with site choice among anglers driven by site attributes and angler characteristics. The biophysical model represents the marine reef environment as a system with different trophic levels identifying algal and coral growth as well as two types of fish (piscivores and herbivores). Ecosystem dynamics are driven by interactions within the trophic levels and interaction between fish populations and fishing activities.The model is used to simulate recreational fishing activities and their interactions with the environment. Recreational fishing sites from the Ningaloo Marine Park, an iconic coral reef system in Western Australia, are used as a case study. A set of management strategies, including “business-as-usual” and different site closure durations, are assessed for two different levels of fishing pressures. The results show that not only the effectiveness but also the distribution of management impacts across space and over time can be very different from what one would expect without the benefit of integrated modeling.     

The working for water programme: Evolution of a payments for ecosystem services mechanism that addresses both poverty and ecosystem service delivery in South Africa

A payments for ecosystem services (PES) system came about in South Africa with the establishment of the government-funded Working for Water (WfW) programme that clears mountain catchments and riparian zones of invasive alien plants to restore natural fire regimes, the productive potential of land, biodiversity, and hydrological functioning. The success of the programme is largely attributed to it being mainly funded as a poverty-relief initiative, although water users also contribute through their water fees. Nevertheless, as the hydrological benefits have become apparent, water utilities and municipalities have begun to contract WfW to restore catchments that affect their water supplies. This emerging PES system differs from others in that the service providers are previously unemployed individuals that tender for contracts to restore public or private lands, rather than the landowners themselves. The model has since expanded into other types of ecosystem restoration and these have the potential to merge into a general programme of ecosystem service provision within a broader public works programme. There is a strong case for concentrating on the most valuable services provided by ecosystems, such as water supply, carbon sequestration, and fire protection, and using these as ‘umbrella services’ to achieve a range of conservation goals. The future prospects for expansion of PES for hydrological services are further strengthened by the legal requirement that Catchment Management Agencies be established. These authorities will have an incentive to purchase hydrological services through organisations such as WfW so as to be able to supply more water to their users.