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Does the allocation of property rights matter in the commons?

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  • Leibbrandt, Andreas
  • Lynham, John

Abstract

A popular solution to the Tragedy of the Commons is to create private property rights to access the commons. If resource users care about the welfare of others, they may be unwilling to respect property rights regimes that lead to unfair or inequitable outcomes. We explore in a series of laboratory experiments whether it is possible to undermine the efficacy of property rights solutions through the allocation process. We find that both the extent to which property rights are enforced and how they are allocated significantly affect extraction and compliance. Our findings suggest that one of the most popular allocation methods is suboptimal: we observe that occasional enforcement and the proportional allocation of property rights is dominated by no enforcement and the equal or inverse allocation of property rights. Our results support the view that allocation matters for property rights solutions to the commons problem.

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  • 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.
    • Handle: RePEc:eee:jeeman:v:89:y:2018:i:c:p:201-217
    DOI: 10.1016/j.jeem.2018.04.003
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    1. 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.
    2. Wang, M. & Zhou, P., 2022. "A two-step auction-refund allocation rule of CO2 emission permits," Energy Economics, Elsevier, vol. 113(C).
    3. Karimi, Abdul Matin & Delgado, Abraham García & Soliman, Ashrakat El-Amir & Sánchez Ramos, Karen Melissa, 2020. "Property Rights and Social Norms for Managing the Commons," MPRA Paper 98642, University Library of Munich, Germany.

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    More about this item

    Keywords

    Tragedy of the commons; Privatization; Grandfathering; Equity; Reciprocity; Social norms; Social preferences;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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