Reducing strategic uncertainty increases group protection in collective risk social dilemmas

Ivo Steimanis (), Natalie Struwe, Julian Benda () and Esther Blanco ()

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: Interrelated global crises - climate change, pandemics, loss of ecosystem services and biodiversity - pose risks that demand collective solutions. Uncertainty about others’ behavior, coupled with the dependence on some to take collective efforts to mitigate risks for all (e.g. conservation of natural habitats by those living at wildlife boarders to reduce risk of zoonoses), complicates collective action. We extend the experimental collective risk social dilemma to consider that some individuals (’beneficiaries’) cannot protect themselves and must rely on others (’providers’) for collective protection. Our approach allows to disentangle the relevance of self-interest and uncertainty over the actions of others in explaining self-reliance by providers. Our findings show that reducing strategic uncertainty leads to more collective solutions, with more beneficiaries protected, less resources wasted, and lower inequality. Moreover, we show that institutions inspired by payments for ecosystem services that allow beneficiaries to make compensation transfers to providers of protection are highly effective in fostering collective solutions. Indeed, these voluntary institutions are similarly effective in alleviating the social dilemma as (the hypothetical case of) fully removing strategic uncertainty. Thus, we show that understanding the reasons for self-reliance in collective risk social dilemmas can help develop better institutions to enhance the use of collective solutions, and thereby enhancing social welfare.

Keywords: Collective risk social dilemma; cooperation; mitigation; adaptation; strategic uncertainty; selfinterest; public good; donation; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C92 D64 D70 H41 Q54 (search for similar items in EconPapers)
Pages: 80
Date: 2025-02
New Economics Papers: this item is included in nep-cdm, nep-env, nep-exp and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2025-02

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