It's been a while since I last worked on common pool resource games (and by a while I mean a year and a few months). But recently, in my search for cooperative games under uncertainty, I came upon this interesting paper by Rapoport and Au (2001) at the journal of Organizational Behavior and Human Decision Process. The paper looks at how bonuses or penalties affect individual decision making under both strategic uncertainty (i.e., when harvesting behavior of other group members is uncertain) and environmental uncertainty (i.e, when the size of the CPR is uncertain). The reason I find the paper interesting is not so much that it tests the effects of bonuses and penalties on individual behavior (I think the literature has lots to say about that) but that its formulation of the CPR game is different from what I'm used to. Instead of profit being equal to the difference between private benefits and private and social costs from extraction, the profit function that Rapoport and Au uses is equal to the extraction if the sum of extractions across all members of the group is less than or equal to the total pool and 0 otherwise. Theoretically, they find that a bonus decreases group extraction while a penalty increases in. Experimentally, they find that both decreases group extraction, with penalties being more effective.
You can download the paper from www.sciencedirect.com/science/article/pii/S0749597800929352
Given two technologies that can be used to combat the disastrous effects of climate change - through abatement and through reverse engineering -, Barrett and Dannenberg looks at how uncertainty about climate change affects which technology countries use and whether countries are able to achieve their emission target. Results for laboratory experiments show that disastrous effects of climate change will be avoided when the target is known. This holds whether or not the intensity of the disaster is known. Unfortunately, when the target is unknown (under both known and unknown disaster intensity), disastrous effects of climate change will not be avoided.
Account A: 10 chips worth €0.10 each
Account B: 10 chips worth €1.00 each
Game is one-shot and there are 3 stages:
There were 5 trial rounds and group members were reshuffled every time.
Copy of the paper can be downloaded at www.pnas.org/content/109/43/17372.short.
Recently published paper by Gosnell and Tavoni examines climate change negotiations and how heterogeneity in wealth (poor vs. rich countries) as well as bargaining (in the form of making binding side deals) affect whether or not countries (represented by a participant) can achieve a target level of emissions. The authors find that 100% of groups achieve their targets by the 4th round when wealth is homogenous. While the same is not true when wealth is heterogeneous, the authors do find that side deals among rich individuals are more binding for "successful" groups than "unsuccessful" groups under both the PSD and ASD (see treatment acronym and definition below).
Their paper can be downloaded at link.springer.com/article/10.1007/s10584-017-1975-3.
Interesting paper by Freeman, et al. (2017) on how the delivery of instructions affect the understanding of participants. Using a one-shot task where a subject is paid the most for doing the task at the correct time, least for doing it earlier, and better by not doing the task at all than by doing it earlier, the authors find that introducing monetary incentives for quiz performance, going through the computerized instructions twice (before and after the quiz), and providing paper instructions alongside computerize instructions increases the number of people doing the task at the correct time. These treatments are compared to the control treatment where subjects complete self-paced computerized instructions, including practice round.
Download paper at papers.ssrn.com/sol3/papers.cfm?abstract_id=3010380
Anna is an applied microeconomist interested in the relationship between human behavior and economic decision-making. She works primarily on environmental and natural resource topics using experimental, behavioral, survey and spatial datasets. This blog was created for the sole purpose of archiving and sharing interesting articles and ideas.