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Endogenous vs. exogenous regulations in the commons

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  • Abatayo, Anna Lou
  • Lynham, John

Abstract

It is widely believed that there is strong experimental evidence to support the idea that exogenously imposed regulations crowd out the intrinsic motivations of common pool resource (CPR) users to refrain from over-harvesting. We introduce a novel experimental design that attempts to disentangle potential confounds in previous experiments. A key feature of our experimental design is to have the exact same regulations chosen endogenously as those that are imposed exogenously. When we compare the same regulations chosen endogenously to those externally imposed, we observe no differences in extraction levels among CPR users in a laboratory experiment. We also observe no differences between weak external regulations and no regulations, after controlling for a potential confound. However, when we add communication to our endogenous treatment, we observe significant behavioral differences between endogenous regulations with communication and exogenous regulations without communication. Our results suggest that externally imposed regulations do not crowd out intrinsic motivations in the lab and they confirm that communication facilitates cooperation to reduce extraction.

Suggested Citation

  • Abatayo, Anna Lou & Lynham, John, 2016. "Endogenous vs. exogenous regulations in the commons," Journal of Environmental Economics and Management, Elsevier, vol. 76(C), pages 51-66.
    • Handle: RePEc:eee:jeeman:v:76:y:2016:i:c:p:51-66
    DOI: 10.1016/j.jeem.2015.11.006
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    2. Chávez, Carlos A. & Murphy, James J. & Quezada, Felipe J. & Stranlund, John K., 2023. "The endogenous formation of common pool resource coalitions," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 82-102.
    3. Tambunlertchai, Kanittha & Pongkijvorasin, Sittidaj, 2021. "Regulatory stringency and behavior in a common pool resource game: Lab and field experiments," Journal of Asian Economics, Elsevier, vol. 74(C).
    4. Leibbrandt, Andreas & Lynham, John, 2018. "Does the allocation of property rights matter in the commons?," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 201-217.
    5. De Geest, Lawrence R. & Kidwai, Abdul H. & Portillo, Javier E., 2022. "Ours, not yours: Property rights, poaching and deterrence in common-pool resources," Journal of Economic Psychology, Elsevier, vol. 89(C).
    6. Liangdong Lu & Hong Huang & Jiuchang Wei & Jia Xu, 2020. "Safety Regulations and the Uncertainty of Work‐Related Road Accident Loss: The Triple Identity of Chinese Local Governments Under Principal–Agent Framework," Risk Analysis, John Wiley & Sons, vol. 40(6), pages 1168-1182, June.
    7. Ortiz-Riomalo, Juan Felipe & Koessler, Ann-Kathrin & Engel, Stefanie, 2022. "Fostering co-operation through participation in natural resource management. An integrative review," EconStor Preprints 253261, ZBW - Leibniz Information Centre for Economics.
    8. Johan Graafland & Reyer Gerlagh, 2019. "Economic Freedom, Internal Motivation, and Corporate Environmental Responsibility of SMEs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1101-1123, November.
    9. Gerlagh, Reyer & van der Heijden, Eline, 2024. "Going green: Framing effects in a dynamic coordination game," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    10. Smith, Steven M., 2018. "Economic incentives and conservation: Crowding-in social norms in a groundwater commons," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 147-174.
    11. Buckley, R.C. & Guitart, D. & Shakeela, A., 2017. "Contested surf tourism resources in the Maldives," Annals of Tourism Research, Elsevier, vol. 64(C), pages 185-199.
    12. Jordan F. Suter & Sam Collie & Kent D. Messer & Joshua M. Duke & Holly A. Michael, 2019. "Common Pool Resource Management at the Extensive and Intensive Margins: Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 973-993, August.

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    More about this item

    Keywords

    Resource management; Endogenous rule-making; External regulations; Crowding out;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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