Myopic reallocation of extraction improves collective outcomes in networked common-pool resource games

Andrew Schauf and Poong Oh

No w2cxp, SocArXiv from Center for Open Science

Abstract: When individuals extract benefits from multiple resources, the decision they face is twofold: besides choosing how much total effort to exert for extraction, they must also decide how to allocate this effort. We focus on the allocation aspect of this choice in an iterated game played on bipartite networks of agents and common-pool resources (CPRs) that degrade linearly in quality as extraction increases. When CPR users attempt to reallocate their extraction efforts among resources to maximize their own payoffs in the very next round (that is, myopically), collective wealth is increased. Using a heterogeneous mean-field approach, we estimate how these reallocations affect the payoffs of CPR users of different degrees within networks having different levels of degree heterogeneity. Focusing specifically on Nash equilibrium initial conditions, which represent the patterns of over-exploitation that result from rational extraction, we find that networks with greater heterogeneity among CPR degrees show greater improvements over equilibrium due to reallocation. When the marginal utility of extraction diminishes, these reallocations also reduce wealth inequality. These findings emphasize that CPR users’ adaptive reallocations of effort—a behavior that previously-studied network evolutionary game models typically disallow by construction—can serve to direct individuals’ self interest toward the collective good.

Date: 2021-01-12
New Economics Papers: this item is included in nep-gth, nep-net and nep-upt
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:w2cxp

DOI: 10.31219/osf.io/w2cxp

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