Cooperation in the commons with unobservable actions

Nori Tarui, Charles F. Mason, Stephen Polasky, Greg Ellis

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)37-51
Number of pages15
JournalJournal of Environmental Economics and Management
Volume55
Issue number1
DOIs
StatePublished - Jan 2008

Keywords

  • Common property resources
  • Cooperation
  • Dynamic games
  • Renewable resources
  • Subgame perfection
  • Unobservable actions
  • Worst perfect equilibrium

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