Does the Existence of a Public Good Enhance Cooperation among Users of Common-Pool Resources?

Without resorting to the folk theorem or to altruistic preferences, we demonstrate that the problem of overharvesting among individually rational harvesters in a local commons vanishes if the harvesters share, and voluntarily contribute to, some public good. Formulating the model as a two-stage sequ...

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Bibliographic Details
Published in:Land economics 2011-05, Vol.87 (2), p.335-345
Main Authors: Solstad, Jan Tore, Brekke, Kjell Arne
Format: Article
Language:English
Subjects:
Altruism
Economic theory
Hunter gatherers
Joint ownership
Nash equilibrium
Natural resources
Private goods
Public goods
Social norms
Utility functions
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Summary:Without resorting to the folk theorem or to altruistic preferences, we demonstrate that the problem of overharvesting among individually rational harvesters in a local commons vanishes if the harvesters share, and voluntarily contribute to, some public good. Formulating the model as a two-stage sequential game, the harvesting of a renewable natural resource takes place at the first stage. The observed harvesting surplus is then used for buying private goods and contributing to public goods at the second stage. In this setting, the model shows that the harvesters share an individual objective of maximizing total harvesting surplus.
ISSN:0023-7639
1543-8325
DOI:10.3368/le.87.2.335