Economic Experiments on the Defense of Common Pool Resources

This project aims to design and conduct economic laboratory experiments to investigate behavioral issues related to the defense of common pool resources from encroachment by outsiders. Common pool resources are assets -- often natural assets such as forests, fisheries and water supplies --t hat are managed by a group of users. These resources are prone to inefficient use because individuals tend toward over-exploitation relative to what would maximize the welfare of the group. However, observational and experimental evidence show that common pool users can often govern themselves to successfully protect their resource from exhaustion and resolve the social dilemma (Berkes 1985, Ostrom et al. 1992). Self-governance in practice and in laboratory settings often involve mutual monitoring of individuals within a group and sanctioning those individuals that violate norms of conservation. There is a large and growing literature in economics, political science, anthropology, and other disciplines about self-governance of common pool resources. However, there are many problems of common pool resources in which group members must not only regulate their own behavior, they must also defend their resource from encroachment by outsiders. Examples include territorial user rights fisheries (TURFS) for benthic resources in Chile and South Africa. The famous lobster gangs of Maine offer another example of common pool resource users cooperating to defend territorial boundaries. There are also potential applications beyond the management of natural resources, including cooperative efforts by firms to share information and resources to protect themselves against cyber attacks, and neighborhood watch groups that seek to limit crime in their neighborhoods by sharing information with each other and with police. While the literature that uses economic experiments to investigate self-governance of common pool resources is large and active, almost none of it is concerned with self-governance that includes protecting resources from outside incursion. This project seeks to fill this gap in the literature with a series of laboratory economic experiments focused on this issue. Specifically, we will design and conduct a series of laboratory experiments to examine the ability of a group of resource users to simultaneously manage their own exploitation of a resource and defend their resource from outside encroachment.