Communication and the extraction of natural renewable resources with threshold externalitiesC. Monica Capra () and Tomomi Tanaka () Emory Economics from Department of Economics, Emory University (Atlanta) Abstract: Non-binding communication, or cheap talk, has been associated with the resolution of coordination failures and social dilemmas in both laboratory and field experiments (see Cooper, et al., 1992, and Clark, Kay, and Sefton, 2000; Isaac and Walker, 1991, Ostrom and Walker, 1991, Ostrom, Gardner and Walker, 1994, and Cardenas, Ahn, and Ostrom, 2003). In simple coordination games, communication is expected to reduce the uncertainty of what other players are likely to do and hence facilitate coordination in the better equilibrium. In social dilemma games, the reasons why communication works are still unclear. Perhaps communication results in an increased sense of group identity, an enhancement of normative orientations toward cooperation, or a necessity to avoid (seek) verbal reprimand (approval) when promises of cooperation are violated (fulfilled). In this paper we use a simple neoclassical growth model with multiple equilibria to investigate the mechanism by which non-binding communication results in lower equilibrium resource extraction. We use a growth model because it provides an adequate dynamic framework for modeling extraction of a natural resource with threshold externalities. New Economics Papers: this item is included in nep-cbe, nep-env, nep-exp and nep-gth Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:emo:wp2003:0602 Access Statistics for this paper More papers in Emory Economics from Department of Economics, Emory University (Atlanta) |
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