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Cooperation in the Commons with Unobservable Actions

Author

Listed:
  • Nori Tarui

    (Department of Economics, University of Hawaii at Manoa)

  • Charles Mason

    (Department of Economics and Finance, University of Wyoming)

  • Stephen Polasky

    (Department of Applied Economics, University of Minnesota)

  • Greg Ellis

    (Department of Economics, University of Washington)

Abstract
We model a dynamic common property resource game with unobservable actions and non-linear stock dependent costs. We propose a strategy profile that generates a worst perfect equilibrium in the punishment phase, thereby supporting cooperation under the widest set of conditions. We show under what set of parameter values for the discount rate, resource growth rate, harvest price, and the number of resource users, this strategy supports cooperation in the commons as a subgame perfect equilibrium. The strategy profile that we propose, which involves harsh punishment after a defection followed by forgiveness, is consistent with human behavior observed in experiments and common property resource case studies.

Suggested Citation

  • Nori Tarui & Charles Mason & Stephen Polasky & Greg Ellis, 2007. "Cooperation in the Commons with Unobservable Actions," Working Papers 200711, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:200711
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    Cited by:

    1. Mason, Charles F. & Polasky, Stephen & Tarui, Nori, 2017. "Cooperation on climate-change mitigation," European Economic Review, Elsevier, vol. 99(C), pages 43-55.
    2. Kotchen, Matthew J. & Salant, Stephen W., 2011. "A free lunch in the commons," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 245-253, May.
    3. Alessandro Tavoni & Maja Schlüter & Simon Levin, 2010. "The Survival of the Conformist: Social Pressure and Renewable Resource Management," Working Papers 2010.127, Fondazione Eni Enrico Mattei.
    4. By Michael Finus & Raoul Schneider, 2015. "Scope and compatibility of measures in international fisheries agreements," Oxford Economic Papers, Oxford University Press, vol. 67(4), pages 865-888.
    5. Michael Finus & Raoul Schneider & Pedro Pintassilgo, 2011. "The Incentive Structure of Impure Public Good Provision – The Case of International Fisheries," Discussion Papers 1103, University of Exeter, Department of Economics.
    6. Anne-Sarah Chiambretto & Hubert Stahn, 2017. "Voluntary Management of Fisheries under an Uncertain Background Legislative Threat," AMSE Working Papers 1712, Aix-Marseille School of Economics, France.
    7. Antoniadou, Elena & Koulovatianos, Christos & Mirman, Leonard J., 2013. "Strategic exploitation of a common-property resource under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 28-39.
    8. Pedro Pintassilgo & Michael Finus & Marko Lindroos & Gordon Munro, 2010. "Stability and Success of Regional Fisheries Management Organizations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(3), pages 377-402, July.
    9. Abbott, Joshua K. & Wilen, James E., 2009. "Regulation of fisheries bycatch with common-pool output quotas," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 195-204, March.
    10. Gabriel S. Sampson & James N. Sanchirico, 2019. "Exploitation of a Mobile Resource with Costly Cooperation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1135-1163, August.
    11. Bediako, Kwabena & Nkuiya, Bruno, 2022. "Stability of international fisheries agreements under stock growth uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    12. Encarna Esteban & Ariel Dinar, 2013. "Cooperative Management of Groundwater Resources in the Presence of Environmental Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(3), pages 443-469, March.
    13. Calvo, Emilio & Rubio, Santiago J., 2013. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," International Review of Environmental and Resource Economics, now publishers, vol. 6(4), pages 289-339, April.
    14. Steven J. Lade & Alessandro Tavoni & Simon A. Levin & Maja Schl�ter, 2013. "Regime shifts in a social-ecological system," GRI Working Papers 105, Grantham Research Institute on Climate Change and the Environment.
    15. Jules Selles, 2018. "Fisheries management: what uncertainties matter?," Working Papers hal-01824238, HAL.
    16. Kaffine Daniel T & Costello Christopher, 2011. "Unitization of Spatially Connected Renewable Resources," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-31, March.
    17. Patel, Amrish & Cartwright, Edward & Mark, Van Vugt, 2010. "Punishment Cannot Sustain Cooperation in a Public Good Game with Free-Rider Anonymity," Working Papers in Economics 451, University of Gothenburg, Department of Economics.
    18. Michael Finus & Raoul Schneider & Pedro Pintassilgo, 2019. "The Role of Social and Technical Excludability for the Success of Impure Public Good and Common Pool Agreements: The Case of International Fisheries," Graz Economics Papers 2019-12, University of Graz, Department of Economics.
    19. Sampson, Gabriel S. & Sanchirico, James N. & Wilen, James E., 2015. "Accounting for internal organization and spatial scale in spatial property rights fisheries," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205641, Agricultural and Applied Economics Association.
    20. Blanco, Ester & Lozano, Javier & Rey-Maquieira, Javier, 2009. "A dynamic approach to voluntary environmental contributions in tourism," Ecological Economics, Elsevier, vol. 69(1), pages 104-114, November.
    21. Florian K. Diekert & Emmi Nieminen, 2017. "International Fisheries Agreements with a Shifting Stock," Dynamic Games and Applications, Springer, vol. 7(2), pages 185-211, June.
    22. Sareh Vosooghi, 2019. "Panic-Based Overfishing in Transboundary Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1287-1313, August.
    23. Finus, Michael & Schneider, Raoul & Pintassilgo, Pedro, 2020. "The role of social and technical excludability for the success of impure public good and common pool agreements," Resource and Energy Economics, Elsevier, vol. 59(C).

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    More about this item

    Keywords

    Common property resource; cooperation; dynamic game; unobservable actions;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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