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Output Sharing Among Groups Exploiting Common Pool Resources

Author

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  • Stephen Schott
  • Neil Buckley
  • Stuart Mestelman
  • R. Andrew Muller

Abstract

This paper provides an experimental testing ground for an equal output-sharing partnership approach as a common pool resource (CPR) management instrument. It examines the behaviour of resource users in output-sharing partnerships of different sizes, and evaluates the impact of partnership size and the way partners are assigned on effort (extraction) levels. Experimental results are very close to Nash predictions, and confirm that group size significantly affects resource user’s effort supply. The first best solution is achieved, when resource users are privately extracting from the CPR and equally sharing their output with the socially optimal number of partners. The way partners are allocated (randomly or with the same partners over 15 periods) does not significantly affect aggregate effort contributions. Income distribution, however, is more equitable with random allocation of partners than with fixed partners.

Suggested Citation

  • Stephen Schott & Neil Buckley & Stuart Mestelman & R. Andrew Muller, 2002. "Output Sharing Among Groups Exploiting Common Pool Resources," Department of Economics Working Papers 2002-06, McMaster University.
    • Handle: RePEc:mcm:deptwp:2002-06
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    References listed on IDEAS

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    1. Chan, Kenneth S. & Mestelman, Stuart & Muller, R. Andrew, 2008. "Voluntary Provision of Public Goods," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 88, pages 831-835, Elsevier.
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    Cited by:

    1. Martin D. Heintzelman & Stephen W. Salant & Stephan Schott, 2005. "Partnerships: A Potential Solution to the Common-Property Problem but a Problem for a Antitrust Authorities," Levine's Working Paper Archive 784828000000000040, David K. Levine.
    2. Matthew J. Baker & Kurtis Swope, 2004. "Sharing, Gift-Giving, and Optimal Resource Use Incentives in Hunter-Gatherer Society," Departmental Working Papers 8, United States Naval Academy Department of Economics.

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