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Does Scarcity Reduce Cooperation? Experimental Evidence from Rural Tanzania

Author

Listed:
  • Gustav Agneman

    (DERG, Department of Economics, University of Copenhagen)

  • Paolo Falco

    (DERG, Department of Economics, University of Copenhagen)

  • Exaud Joel

    (Department of Economics, University of Dar Es Salaam)

  • Onesmo Selejio

    (Department of Economics, University of Dar Es Salaam)

Abstract

Cooperation is essential to reap efficiency gains from specialization, not least in poor communities where economic transactions often are informal. Yet, cooperation might be more difficult to sustain under scarcity, since defecting from a cooperative equilibrium can yield safe, short-run benefits. In this study, we investigate how scarcity affects cooperation by leveraging exogenous variation in economic conditions induced by the Msimu harvest in rural Tanzania. We document significant changes in food consumption between the pre- and post-harvest period, and show that lean season scarcity reduces socially efficient but personally risky investments in a framed Investment Game. This can contribute to what is commonly referred to as a behavioral poverty trap.

Suggested Citation

  • Gustav Agneman & Paolo Falco & Exaud Joel & Onesmo Selejio, 2020. "Does Scarcity Reduce Cooperation? Experimental Evidence from Rural Tanzania," DERG working paper series 20-04, University of Copenhagen. Department of Economics. Development Economics Research Group (DERG).
    • Handle: RePEc:kud:kuderg:2004
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    File URL: https://www.econ.ku.dk/derg/wps/04-2020.pdf
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    References listed on IDEAS

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    Cited by:

    1. Vojtěch Bartoš & Ian Levely & Vojtech Bartos, 2023. "Measuring Social Preferences in Developing Economies," CESifo Working Paper Series 10744, CESifo.

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    More about this item

    Keywords

    scarcity; cooperation; field experiment;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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