The Efficiency of Direct Public Involvement in Environmental Policymaking: An Experimental Test

Christopher Bruce and Jeremy Clark

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: In one of the most ambitious forms of environmental decision-making, representatives of interested parties – environmentalists, developers, farmers, loggers, miners, etc. - are charged with the responsibility of developing a set of public policies that is acceptable to all of them. Although this approach has become increasingly popular, and has been widely discussed in the academic literature, little is known about the characteristics of the outcomes that are reached in this type of negotiation. We do not know, for example, whether these outcomes meet the standard criteria for efficiency or equity. In this paper, we use laboratory experiments to test whether a number of axiomatic models of bargaining can predict the behavior of the parties to environmental decision making. In recognition of the multi-dimensional aspect of most public land use conflicts, we ask pairs of subjects to negotiate over two goods, without the possibility of cash side payments. We thus provide one of the first experimental tests of a prediction associated with the Edgeworth Box: that parties with an initial endowment that is Pareto inefficient will make trades until they reach a Pareto efficient allocation. We further test whether parties in particular reach the Nash bargain when it coincides with or conflicts with outcomes that maximise the parties’ joint payoffs and with outcomes at which the parties’ receive equal payoffs. Finally, the effect of providing parties with full or partial information regarding payoffs is also examined.

Keywords: Axiomatic models of bargaining; Experimental tests; Land use conflicts; Collaborative policymaking (search for similar items in EconPapers)
JEL-codes: C92 D74 H41 J52 Q51 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-05-05
New Economics Papers: this item is included in nep-agr, nep-cdm, nep-env, nep-exp and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Efficiency of Direct Public Involvement in Environmental Policymaking: An Experimental Test (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:08/08

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