Enforcing Compliance with Environmental Agreements in the Absence of Strong Institutions: An Experimental Analysis

This paper uses laboratory experiments to evaluate the performance of a deposit-refund mechanism used to enforce compliance with voluntary public-good commitments made in the absence of strong regulatory institutions. With this mechanism agents decide whether to join an agreement and pay a deposit prior to making their contribution decisions. If an agreement receives sufficient membership to form, members then make their contribution decisions and compliant members are refunded their deposits. If an agreement does not form, then deposits are immediately refunded and a standard voluntary contribution game is played. We find that the deposit-refund mechanism achieves nearly full efficiency when agreements require full participation, but is far less effective, and in some cases disruptive, when agreements require only partial participation. As the mechanism does not require the existence of strong sanctioning institutions, it is particularly suited for enforcing compliance with international environmental agreements.     

Strategic thinking in contests

Experimental Economics - We examine motives for ‘overbidding’ in contests between individuals using a “two-headed” approach to decision-making. In “two-headed”...     

The Role of Non-Binding Pledges in Social Dilemmas with Mitigation and Adaptation

Environmental and Resource Economics - This study presents experimental results on the role that non-binding pledges have on the ability of groups to manage a threat of probabilistic group damages...