DP2925 Appropriating the Commons - A Theoretical Explanation

Author(s): Armin Falk, Ernst Fehr, Urs Fischbacher
Publication Date: August 2001
Keyword(s): common pool resources, experiments, fairness, fairness models, game theory, reciprocity
JEL(s): C70, D63, H41
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2925

In this Paper we show that a simple model of fairness preferences explains major experimental regularities of common pool resource (CPR) experiments. The evidence indicates that in standard CPR games without communication and without sanctioning possibilities inefficient excess appropriation is the rule. When communication or informal sanctions are available, however, appropriation behaviour is more efficient. Our analysis shows that these regularities arise naturally when a fraction of the subjects exhibits reciprocal preferences.