1 “Overcoming Asymmetries in Local Commons Dilemma

1ThisresearchhasbeenpossiblebecauseoftheideasandsupportatdifferentstagesfromSamuelBowles,JeffCarpenter,ElinorOstrom,JohnStranlund,JamesWalkerandCleveWillis.Errorsremainontheauthor’s.InColombiaImustthankthefieldpractitionersandfellowsfromHumboldt,WWFandFundacionNaturawhohelpedpre-testandconducttheexperiments.VeryspecialthanksaredueLuisGuillermoBaptisteandSarahHernandezatHumboldt,CarmenCandeloatWWFandJuanGaviria,NancyVargasandDaniloSalasatNatura.FinancialsupportforthefieldworkwasprovidedbytheMacArthurFoundation,theInstitutodeInvestigaciondeRecursosBiologicosAlexandervonHumboldt,theWWFColombianprogram,andFundacionNatura-Colombia.AlsothankstoResourcesfortheFutureforfinancialsupportatthelaststageofthisresearch.1“OvercomingAsymmetriesinLocalCommonsDilemmas:EvidencefromFieldExperiments”JuanCamiloCardenas1December,1999Abstract:Thispaperexploresthroughasetoffieldexperimentstheeffectsofasymmetricpayoffstructuresinalocalcommonsdilemmabyvaryingtheindividualwageontheeffortallocatedoutsidethecommonsandobservingtheindividual’sbehaviorinasymmetricandsymmetricwagegroups.Inbothtreatmentsgroupsofeightsubjectsgothroughafirstsetofroundsundernocommunicationandasecondstagewithgroupdiscussionsbeforeeachround.Theresultsconfirmthatnon-bindingcommunicationiseffectiveinfosteringcooperationandreducingfree-riding.Wefoundhigherlevelsofgroupefficiencyachievedbyheterogenousgroups,butcontrarytotheoreticalpredictions,thegainsinefficiencywereduetothehighcooperationbythelowoutsidewageplayerswhilethehighwageplayersremainedclosertotheirNashbestresponsewhichwas,however,lessdetrimentaltogroupefficiency.Further,face-to-facecommunicationinducedchangesinbehaviormainlyforthelowwageplayersbutnotforthehighwageones.However,thosegroupswhoachievedthehighestsocialefficiencies,particularlyaftercommunicationwasallowed,diditbydevelopingasharednormofequaleffortacrossthehighandlowwagetypes,despitethefactthatthesocialoptimalsolutioncalledfordifferentiatedstrategiesfor“rich”and“poor”.Suchasecond-beststrategyyieldedhighergainsandwaseasierandlesscostlytomonitorandreinforcebythegroup.Theresultssuggestthat,contrarytoconventionalwisdom,povertymaynotleadinevitablytoover-extractingofcommon-poolresources.TheresultsalsocontributetoqualifythepropositionsbyOlson(1965)andBergstrom,BlumeandVarian(1986)thatincomeandwealthinequalitiescouldincreasecooperationincollectiveactiondilemmas.2‘Localcommons’isassumedheretobeasituationinwhichagrouphasaccesstoacommon-poolresource,andwherethereispartialexcludabilityandpartialrivalryorsubtractability(Ostrom,1990).Inthissense,thelocalcommonssharesthesubtractabilityfeaturewithprivategoodsandthenonexludabilityfromprivategoods,butitdoesnotnecessarilymeanaresourceownedcommunally.21.Introduction.Manycommunitiesuselocalcommonsresourcesasanimportantcomponentoftheirincomesources2.Peopleallocateindividualeffortbetweenextractingcommon-poolresourcesandanoutsideoptiongivenbytheirprivateopportunitiesandbasedontheirphysicalorhumancapital.Oneofthecommonwaysgroupheterogeneitycanplayaroleintheuseoftheseresourcesisbyhavingasymmetriesintheiroutsideoptions.Someusersmayhavedifferentpossibilitiesforallocatingtheireffortoutsidethecommons,makingtheirmarginalbenefitsfromusingthecommonsasymmetric.Unequallandownership,accesstocredit,oreducationprovidesomegroupmembersbetterincomesourcesoutsidethecommons.Intuitively,somemightarguethatpeoplewithbetterexitoptionsshouldextractlessfromthelocalcommons,whileothersworseoffshouldextractmoreastheirincomesdependmoreonextraction.Othersmightreasonthatthosewithfeweroutsidealternativesmightbemoreinterestedinsustainableextractionoftheresourceastheirmarginalgainsfromconservationarehigher.Ineithercase,thesocialoutcomewilldependontheindividuals’rationalitydeterminedbytheincentivestofree-ride(overextract)andthepossibleParetoimprovementsfromcooperationbygroupmembers.Theliteratureongroupheterogeneityandthepossibilitiesofcooperationandcollectiveactioningroupsisvastbutinconclusive,rangingfromthosewhobelieveheterogeneityfosterscooperationandpublicgoodsprovisionbytherich,tothosewhostressthedetrimentaleffectsofinequalityandsocialdistanceoncooperation.Howtheseasymmetricoutsideoptionsaffectthepossibilitiesforcooperationorfree-ridingintheuseoftheresourceisthematter3ofthispaper.Wehaveaddressedsuchquestionsbydevelopingamodelofagroupofindividualswhouseaforestthatprovidesmultiplebenefitstothem.Besidesthebenefitsfromuseandnon-usevaluesoftheforest,theirincomesalsodependonanoutsideprivatealternativerepresentedbyamarginalrate(wage)oneffortnotallocatedtoextractingresources.Inotherwords,incomedependsontheallocationoftimebetweenextractingtheforestwhichposesagroupnegativeexternality(e.g.waterquality)andfromthealternativeoutsidetheforestwhichyieldsaprivatemarginalrate.Weintroduceheterogeneitybyassigningasymmetricwageswithinthegroup,thatis,someinagroupearnamuchhigherrateontheirbestprivatealternative;othersearnamuchsmallerrate.Therefore,althoughallmaybenefitequallyfromextractingtheforest,theopportunitycostoflaboronextractingitisdependantontheirnextbestalternative.