Experimental Insights on Forest Management Under an Exogenous Income Shock

Dominik Atella-Suri (), Annalena Tetzner (), Sebastian Kube () and Jan Börner ()
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Dominik Atella-Suri: University of Bonn
Annalena Tetzner: University of Bonn
Sebastian Kube: University of Bonn
Jan Börner: University of Bonn

No 432, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: Negative income shocks may increase households' reliance on common-pool resources and thereby undermine sustainable resource management. We study this in a preregistered laboratory experiment with 120 participants playing a dynamic resource extraction game framed around a community forest. Participants in the Control condition play the baseline game three times, whereas participants in the Shock condition experience a temporary loss of exogenous income in the second part before income is restored in the third. This design allows us to distinguish responses to the income shock from common changes associated with repeated play and to observe behavior after the shock ends. We find that forest extraction increases in Part 2 for the Shock treatment relative to the ongoing baseline in the Control condition. After income is restored in Part 3, extraction decreases and the forest partially recovers. However, the equivalence tests do not clearly show whether behavior fully returns to its pre-shock level or whether some of the shock effect remains. Our findings support previous evidence that economic hardship can increase pressure on shared natural resources.

Keywords: Resource extraction game; Forest commons; Income shock; Lab experiment; Cooperation (search for similar items in EconPapers)
JEL-codes: D70 Q20 Q23 Q50 Q56 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2026-10
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:432

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