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This paper experimentally studies the extraction decisions of a sole owner in a fishery, the population dynamics of which
behave according to the standard deterministic logistic growth model. Four treatments were implemented which differed in the
level of information supplied to the subjects. Compared to the theoretic benchmark, the data reveal tha...
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... fact, more plots of individual extraction decisions indicate a constant stock size in treatments S and No , but not in support of the control theory story. Samples of these are displayed in Figure 5 . The striking pattern is that half of the subjects in treatment No and 19% in S extracted almost nothing. They held their stocks near the biological equilibrium size of 1000 units where growth was very close to zero. This odd behaviour can hardly be rationalized if not in the light of Brehmer’s (1980) observation that people tend to believe in a linear model rather than in other models. If subjects actually believed in a linear relationship between stock size and growth they might have taken for granted that growth increases with stock. From this perspective it would make sense to let stock grow and extract at the end the profit maximizing stock size. Such misperception of linearity in non-linear dynamic systems has been reported in earlier experimental research (see Sterman (1994) for a survey)), as we pointed out in section 3. Another behavioural pattern, which Sterman (1989a, b, 1994) called the misperceptions of feedback , must be seen in the fluctuations of the stock-sizes after extractions (see Figure 6 ). Such fluctuations in stock can be due to “pulse fishing,” a behaviour that makes sense in some fishery environments (Schnier and Anderson 2006), 28 but not in our experiment. Our subjects were informed that they are facing a deterministic system. In such settings, the optimal harvesting behaviour is non-pulsing. It seems particularly surprising that even in the transparent setting of treatment GS (in which subjects experienced feedforward information) cycles and oscillations of stock occurred. Paich and Sterman (1993), who observe ...
Citations
... A relatively small number of studies have removed the social aspects of common pool games and tested whether individuals struggle to navigate resource dynamics in isolation. The outcomes in single-player resource games, like those of common-pool games, tend to be heterogenous (Hey et al., 2009;Messick & McClelland, 1983;Schnier & Anderson, 2006). Operating by themselves, some struggle to sustain resources, eroding or exhausting them prematurely. ...
Encouraging sustainable use of limited natural, social, and economic resources requires understanding the variety of ways in which people think about how resources work and how they adjust their behaviour (or not) as available resources fluctuate. Previous investigations which have focused on understanding how individuals navigate erodible resources, have tended to use group-based, common pool games. However, such social games make it difficult to disentangle whether resource erosion is linked to difficulty navigating the dynamics of the resource or caused by social factors. Here, in two experiments, we recruited 781 participants to play a single-player resource management game in which individuals were invited to harvest monetary rewards from a fully depletable but stochastically replenishing resource over time. We find that the ability to sustain a resource over successive harvesting opportunities (in order to maximize the total harvested rewards) is reliably worse in individuals reporting elevated psychological distress, the often cooccurring hazardous alcohol use, and elevated rates of delay discounting. The associations between resource outcomes, harmful alcohol use, and psychological distress remained substantial even once we had controlled for elevated discounting rates (as a form of impulsivity and a strong risk factor for these health challenges). By contrast, individuals who reported higher levels of financial literacy and general well-being achieved better resource outcomes. Our observations demonstrate that the capacity to respond effectively to the dynamics of a resource are compromised in individuals at risk of psychological and alcohol-related disorders.
... A relatively small number of studies have removed the social aspects of common pool games and tested whether individuals struggle to navigate resource dynamics in isolation. The outcomes in single-player resource games, like those of common-pool games, tend to be heterogenous (Hey et al., 2009;Messick & McClelland, 1983;Schnier & Anderson, 2006). Operating by themselves, some struggle to sustain resources, eroding or exhausting them prematurely. ...
Encouraging sustainable use of limited natural, social, and economic resources requires understanding the variety of ways in which people think about how resources work and how they adjust their behaviour (or not) as available resources fluctuate. Previous investigations which have focused on understanding how individuals navigate erodible resources, have tended to use group-based, common pool games. However, such social games make it difficult to disentangle whether resource erosion is linked to difficulty navigating the dynamics of the resource or caused by social factors. Here, in two experiments, we recruited 781 participants to play a single-player resource management game in which individuals were invited to harvest monetary rewards from a fully depletable but stochastically replenishing resource over time. We find that the ability to sustain a resource over successive harvesting opportunities (in order to maximize the total harvested rewards) is reliably worse in individuals reporting elevated psychological distress, the often cooccurring hazardous alcohol use, and elevated rates of delay discounting. The associations between resource outcomes, harmful alcohol use, and psychological distress remained substantial even once we had controlled for elevated discounting rates (as a form of impulsivity and a strong risk factor for these health challenges). By contrast, individuals who reported higher levels of financial literacy and general well-being achieved better resource outcomes. Our observations demonstrate that the capacity to respond effectively to the dynamics of a resource are compromised in individuals at risk of psychological and alcohol-related disorders.
... has been surprisingly scant consideration of another potentially fundamental factor in poor resource management: the cumulative impacts of ineffective individual strategies (Moxnes 1998;Hendrickx et al. 2001;Ostrom 2007). This is surprising given the acknowledged potential for individual cognitive and behavioural biases to undermine group-based resource outcomes (Hey et al., 2009;Messick & McClelland, 1983;Moxnes, 1998;Schnier & Anderson, 2006). ...
... In fact, resource outcomes in single-player games tend to be heterogenous (Hey et al., 2009;Messick & McClelland, 1983;Schnier & Anderson, 2006). Individuals often erode or exhaust resources prematurely. ...
... Critically, knowing the maximum number of remaining harvesting opportunities provided no direct information about the resource dynamics or strategic clues, except on the final round of the game when participants know they can harvest the entire resource without penalty (Hey et al., 2009). Up until that point, best play with both known and unknown horizons involved harvesting amounts of rewards that allowed the resource to replenish to its maximum level of 60 (without forfeiting any replenished rewards above this maximum) to support larger harvests over the duration of the game. ...
Research into improving poor resource management has tended to focus on social interventions that mitigate so-called 'Tragedy of the Commons' outcomes. Less work has investigated interventions to help individuals better manage their personal resources. Over three studies (N=1,597), we test whether informational cues can improve resource management strategies while individuals harvest from a replenishing but depletable resource, returning monetary rewards. To succeed, individuals need to learn about the dynamics (and vulnerability) of the resource while avoiding the long-term costs of early bad decisions. We find little evidence that outcomes are improved by knowledge of the potential monetary returns of the resource or by prior encounters with its dynamics. By contrast, future-orienting information about the potential availability of a resource; its horizon – operationalized as the maximum number of remaining harvesting opportunities – dramatically improves individual resource outcomes (in Experiments 1 and 2). This future-oriented cue did not provide information about the dynamics of the resource that could be used to infer an improved resource management strategy and its benefits are not transitory: informational 'nudges' about the resource horizon continue to improve outcomes over multiple encounters (Experiment 3). These findings indicate that when individuals try to explore and manage a personal resource in uncertain environments where early missteps have long-term adverse consequences, simple future-orienting cues about potential resource longevity improve harvesting decisions. Our findings also highlight how variability in how individuals approach resource management problems per se might contribute to resource difficulties at the group-level.
... This is not surprising, as the shape of the curve describing resource size and appropriation effort over time for this treatment differs from the other treatments in the IND and UKNL studies. Whereas the mixed model does well in predicting most treatments' resource size curves that follow the pattern of a quick decrease in the first 10 periods followed by a flattening of the curve-as we also see in other CPR experiments [59,60]-it does not do well in predicting a resource size curve as visible in the EHSH treatment of the IND study. The fact that the random model has a relatively high fit for the EHSH treatment in the IND study does not necessarily mean that the EHSH subjects acted randomly. ...
Rising migration numbers and the resulting increase in economic and sociocultural heterogeneity in societies all over the world are theorised to put pressure on the sustainable use of common-pool resources [CPRs]. Increased heterogeneity is argued to decrease trust and diversify interests between resource users, leading to overuse and decline of natural and man-made CPRs. The aim of this paper is to understand cooperative behaviour under economic and sociocultural heterogeneity in CPRs, through the analyses of experimental data including 344 subjects from the United Kingdom and the Netherlands, and 144 subjects from India. Multilevel regression, ordinal logistic regression, linear conditional-contribution profiles [LCPs] and agent-based models [ABMs] are used to analyse and replicate experimental outcomes on the micro- and macro-level. Results show that the combination of economic and sociocultural heterogeneity affects cooperation negatively when the decision-situation is perceived as unfair, but that neither economic nor sociocultural heterogeneity on themselves affect cooperation negatively. Economic heterogeneity is even found to affect cooperation positively relative to homogeneity. Player type classification based on LCP scores shows that experimental outcomes can be interpreted with player types, and ABM simulations validate the experimental results by replicating the main outcomes.
... An effect can be expected for these first few periods of the game: subjects may not know the game well enough to understand the consequences of their behaviour until after the first couple of periods. However, in the current game the initial drop of the resource size is not necessarily an artefact of participants misunderstanding the game but rather a behavioural pattern common in CPR games (see for instance [31] and [93]). Thus, as this is a process that is not an unnatural behavioural response to the game but a process that can be expected to be found in any CPR, the models will not control for startgame effects. ...
... This trend is very similar to the trend shown in the CPR game by Janssen, Holahan, Lee and Ostrom [31], under treatments of no communication and punishment and costly punishment. A steep initial drop in resource size is also visible in the first 10 periods of the CPR fishing experiment by Hey, Neugebauer and Sadrieh [93], in a treatment where information resource growth and stock size are available. ...
... With the use of detailed and heavily contextualised games, comes a more detailed-and thus limited-interpretation of the results; the results of this study are valuable for commonpool resources, and especially resources with structures similar to fishing grounds. With the information about the resource size (fish stock) available for players to see at the beginning of every new period, the results may not hold in situations where the total allowable catch cannot be correctly measured because the fish population dynamics is unknown [93]. In addition, whereas players could see the history of other players' actions, this may not always be the case (see for instance Lacomba, Lagos and Perote [113]). ...
The increasing heterogeneity of populations affects cooperation in common-pool resources in a time where the depletion of natural resources is a growing problem. This study investigates the effects of economic and sociocultural heterogeneity on trust and cooperation in common-pool resources using a laboratory experiment. The experiment comprises two Investment Games and a Common-Pool Resource Game, with a sample of 344 subjects from the United Kingdom and the Netherlands. By measuring the effects of economic and sociocultural heterogeneity separately as well as combined, this study disentangles the effects of specific heterogeneity types on cooperation in common-pool resources; something that has not been done before. Higher levels of trusting behaviour are found to have a positive effect on cooperation on the micro- and macro-level over time. While theory suggests negative effects of both forms of heterogeneity on cooperation through decreased levels of trust, the results show a surprising positive effect of economic heterogeneity on cooperation, but a negative effect if economic and sociocultural heterogeneity are combined. This study concludes that economic inequality can promote cooperation in CPRs, unless this inequality is lined up with sociocultural differences.
... Experimental economics provides a new perspective and avenues for policy makers and scholars [22,23] in the sustainability area. The effects of non-cooperative behavior have been studied in the laboratory in different contexts such as public goods [24,25], natural resources [26,27], and team production [28]. This paper adds new evidence and theoretical insights to the role of entry costs in teamwork. ...
This research studies how incentives to cooperation and sustainability through up-front pay mechanisms can impact teamwork. For this purpose, we carry out certain laboratory experiments on the two-player Minimum Effort Game. First, we compare two treatments: one with "free play teams", against teams forced to make a non-refundable up-front payment that covers the total output in case of maximum contribution, which we call "optimal entry cost teams". In the second comparison, experimental results are focused on different amounts in the up-front pay in order to test the theoretical prediction that higher entry costs might improve efficiency (optimal entry cost treatment vs. medium entry cost treatment). We find that the up-front pay mechanism induces higher effort levels compared to the "free play teams", which converge to the efficient and sustainable solution. The increase in the up-front pay, however, does not seem to accelerate such a convergence. These findings provide evidence for a new mechanism to encourage efficiency and sustainability in firms.
Open access resource problems and harmful pollutants from manufacturing activities are common in resource management practices. Nevertheless, their implications have only been studied in different and separate frameworks that are not covered within the same structure. Previous studies suggest that resource management enforced by one country can increase welfare levels and rebuild resource conservation, compared to the case where no country imposes resource management policies. However, in real-life examples, the harvesting and manufacturing industries exert simultaneous pressure on fishery resource stocks, thereby changing the nature of the supply curve of renewable resources. This study investigates the effects of trade liberalization under unilateral resource management regimes in a two-country, two-sector model, in which both production sectors can detrimentally affect renewable natural resources by generating two interacting environmental burdens: excessive harvesting and industrial pollution. It is demonstrated that unilateral resource management applied by a country in which the resource-good sector is relatively less damaging to fishery stocks is welfare-reducing for both countries compared to the situation where neither manages its resource sector. This result is identified as “immiserizing resource management.” Notably, however, unilateral resource management by one country in which the resource-good sector has a more significant negative impact than the manufacturing industry can benefit both trading partners in welfare terms; this is referred to as “improving resource management.” Policymakers in international organizations should consider the relative dominance of externalities in the presence of weak property rights before requiring resource management as a condition for participating in international trade.
We conduct a laboratory experiment to test a continuous-time model that represents a dynamic groundwater extraction problem in an infinite horizon. We compare the observations to the equilibrium path of the usual behaviours, for the case where the player is alone in extracting the resource (optimal control) and when two players extract the same resource simultaneously (differential game). We use a within-subjects design. This allows us to identify individual profiles of players playing alone and then characterize groups based on their composition with respect to these individual behaviours. We find that approximately a quarter of the players and groups succeed in playing (significantly) optimally, and none behave myopically. Moreover having an agent that behaved optimally in the control in the pair increases the likelihood that the group cooperates. We also identify other categories of players and groups that allows us to classify an additional 50% of the observations.
We study the impact of discrete versus continuous time on the behavior of agents in the context of a dynamic common pool resource game. To this purpose, we consider a linear quadratic model and conduct a lab experiment in which agents exploit a renewable resource with an infinite horizon. We use a differential game for continuous time and derive its discrete time approximation. In the single agent setting, we fail to detect, on a battery of indicators, any difference between agents’ behavior in discrete and continuous time. Conversely, in the two-player setting, significantly more agents can be classified as myopic and end up with a low resource level in discrete time. Continuous time seems to allow for better cooperation and thus greater sustainability of the resource than does discrete time.
Complex dynamic systems such as common-pool resource systems can undergo a critical shift at a given threshold, the so-called tipping point, which potentially requires substantial changes from the management system. We present in this research a framed laboratory experiment design to examine how the threat of economic sanctions influences the strategic management of a common-pool resource. We use the context of the East Atlantic bluefin tuna international fishery as it has been the archetype of an overfished and mismanaged fishery until a dramatic reinforcement of its regulations followed the threat of a trade ban. We consider endogenous threats and examine their effects on cooperation through harvest decisions taken in the context of non-cooperative game theory in which cooperation could be sustained using a trigger strategy. Our experiment results show that the threat of economic sanctions fosters more cooperative behaviors, less over-exploitation, and a more precautionary management of resources, reducing the economic rent dissipation. This result is exacerbated when the location of the tipping point that triggers the economic sanction is uncertain. In order to avoid free-riding behaviors and foster the emergence of a self-enforcing agreement, we suggest to introduce economic sanctions, such as trade restrictions, associated with uncertain biological limit reference points.
