Does scarcity exacerbate the tragedy of the commons? Evidence from fishers’ experimental responses

Jorge Higinio Maldonado () and Rocio del Pilar Moreno-Sanchez ()

No 6528, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Economic Experimental Games (EEG) have challenged the theoretical prediction showing that individuals balance own and collective interests when making decisions that deviate away from suboptimal Nash equilibrium. However, few studies have analyzed whether these deviations from Nash equilibrium towards social optimum are affected as the stock of resource changes. Performing EEG with real fishers we test the hypothesis that behavior of participants –measured as relative deviations from Nash equilibrium- differs under a situation of abundance versus a situation of scarcity. The design of our EEG is based on a profit maximization model that incorporates intertemporal effects of aggregated extraction. Our findings show that in a situation of scarcity, players over extract the resource making decisions above the Nash equilibrium, obtaining less profit, mining the others-regarding interest, and exacerbating the tragedy of the commons. This result challenges previous general findings from the EEG literature. When individuals face abundance of the resource, however, they deviate downward from the individualistic and myopic behavior prediction. This phenomenon of private inefficient over exploitation is corrected when management strategies are introduced in the game, which underlines the importance of institutions.

Keywords: Resource /Energy Economics and Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env, nep-exp and nep-gth
Date: 2008
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