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6 - How Norms Help Reduce the Tragedy of the Commons: A Multi-Layer Framework for Analyzing Field Experiments

Published online by Cambridge University Press:  05 June 2012

Juan-Camilo Cárdenas
Affiliation:
Facultad de Economia-CEDE, Universidad de Los Andes, Bogota, Columbia
Elinor Ostrom
Affiliation:
Arthur F. Bentley Professor of Political Science, Indiana University
John N. Drobak
Affiliation:
Washington University, School of Law
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Summary

INTRODUCTION

Contemporary economic theory is one of the more successful, empirically verified social science theories to explain human behavior. It does best, however, in the settings for which it was developed – the exchange of private goods and services in an open, competitive market. The theory is based on a theory of goods, a set of rules for social exchange, and a model of human behavior. When the goods involved are easily excludable and rivalrous, and individuals are interacting in a competitive market, theoretical predictions have strong empirical support. When the goods involved are not easy to exclude – such as public goods or common-pool resources (CPRs) – conventional theoretical predictions receive much less empirical support. In a static setting, the conventional predictions are that individuals will not produce public goods and that they will overharvest common-pool resources. The evidence for both predictions is mixed.

In “public goods” experiments, for example, instead of contributing nothing to the provision of a public good, as is predicted by neoclassical theory for individuals pursuing material payoffs, individuals tend to contribute, on average, between 40 to 60 percent of their assets in a one-shot game. In repeated games, the average level of contribution starts at around 50 percent but slowly decays toward the predicted zero level. With non-binding communication – cheap talk – participants are able to sustain cooperation in public goods experiments for long periods of time.

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Chapter
Information
Norms and the Law , pp. 105 - 136
Publisher: Cambridge University Press
Print publication year: 2006

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