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Linking Appropriation of Common Resources and Provision of Public Goods Decreases Rate of Destruction of the Commons

Anabela Botelho, Ariel Dinar, Ligia Pinto and Amnon Rapoport
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Ariel Dinar: Water Science and Policy Center, Department of Environmental Sciences, University of California, Riverside

No 50, NIMA Working Papers from Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho

Abstract: Experimental studies of common pool resource (CPR) dilemmas are frequently terminated with collapse of the resource; however, there is considerable evidence in real-world settings that challenge this finding. To reconcile this difference, we propose a two-stage model that links appropriation of the CPR and provision of public goods in an attempt to explain the emergence of cooperation in the management of CPRs under environmental uncertainty. Benchmark predictions are derived from the model, and subsequently tested experimentally under different marginal cost-benefit structures concerning the voluntary contribution to the provision of the good. Our results suggest that the severity of the appropriation problem is significantly mitigated by the presence of an option for voluntarily contributing a fraction of the income surplus from the appropriation phase to the provision of the public good.

Pages: 25 pages
Date: 2013-04
New Economics Papers: this item is included in nep-cbe, nep-env, nep-exp and nep-pub
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