Communication and Output Sharing in Common Pool Resource Environments

Neil Buckley, Stuart Mestelman, Andrew Muller, Stephan Schott and Jingjing Zhang

Department of Economics Working Papers from McMaster University

Abstract: We study cheap-talk communication in common pool resource environments with and without output-sharing groups. Communication in groups of 12 does not improve efficiency over the non-cooperative Nash outcome without communication. Organizing subjects into output-sharing groups of four players introduces sufficient free-riding incentives to achieve full efficiency. Within-group communication decreases efficiency by countervailing the free-riding incentives induced by output sharing and enhancing between-group competition. The effects are stronger when output-sharing groups have repeated fixed membership. Adding public communication reduces the efficiency-reducing effects of within-group communication. Restricting private communication within social groups that do not share output increases efficiency to almost 100%.

Keywords: Common pool resources; communication; competition; group behavior; partners and strangers; experiments (search for similar items in EconPapers)
JEL-codes: C72 C92 Q20 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2013-03
New Economics Papers: this item is included in nep-agr, nep-cbe, nep-env, nep-exp and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2013-06

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