DP2925 Appropriating the Commons - A Theoretical Explanation

• Ernst Fehr Armin Falk Urs Fischbacher
22 Aug 2001

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.