Hostname: page-component-586b7cd67f-dsjbd Total loading time: 0 Render date: 2024-12-01T00:20:53.874Z Has data issue: false hasContentIssue false
  • English
  • Français

Do Static Externalities Offset Dynamic Externalities? An Experimental Study of the Exploitation of Substitutable Common-Pool Resources

Published online by Cambridge University Press:  15 September 2016

Gastón A. Giordana ,
Marielle Montginoul  and
Marc Willinger
Gastón A. Giordana
Affiliation:
Central Bank of Luxembourg in Luxembourg, Luxembourg. The research presented in this paper was done mainly during his Ph.D. work at Lameta and Cemagref in Montpellier, France
Marielle Montginoul
Affiliation:
researcher at Cemagref UMR G-EAU in Montpellier, France
Marc Willinger
Affiliation:
Université de Montpellier 1 UMR Lameta in Montpellier, France
Get access

Abstract

Overexploitation of coastal aquifers may lead to seawater intrusion, which irreversibly degrades groundwater. The seawater intrusion process may imply that its consequences would not be perceptible until after decades of accumulated overexploitation. In such a dynamic setting, static externalities may enhance the users’ awareness about the resource's common nature, inducing more conservative individual behaviors. Aiming to evaluate this hypothesis, we experimentally test predictions from a dynamic game of substitutable common-pool resource (CPR) exploitation. The players have to decide whether to use a free private good or to extract from one of two costly CPRs. Our findings do not give substantial support to the initial conjecture. Nevertheless, the presence of static externalities does induce some kind of payoff reassurance strategies in the resource choice decisions, but these strategies do not correspond to the optimum benchmark.

Keywords

common-pool resourcessubstitutable goodsdynamic externalitiessurvival dataproportional hazardexperiment
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 39 , Issue 2 , April 2010 , pp. 305 - 323
Copyright
Copyright © 2010 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aggarwal, R.M., and Narayan, T.A. 2004. “Does Inequality Lead to Greater Efficiency in the Use of Local Commons? The Role of Strategic Investments in Capacity.” Journal of Environmental Economics and Management 47(1): 163–182.CrossRefGoogle Scholar
Apesteguia, J. 2006. “Does Information Matter in the Commons? Experimental Evidence.” Journal of Economic Behavior and Organization 60(1): 55–69.CrossRefGoogle Scholar
Barham, B.L., Chavas, J.-P., and Coomes, O.T. 1998. “Sunk Costs and the Natural Resource Extraction Sector: Analytical Models and Historical Examples of Hysteresis and Strategic Behavior in the Americas.” Land Economics 74(4): 429–448.CrossRefGoogle Scholar
Barrocu, G. 2003. “Seawater Intrusion in Coastal Aquifers of Italy.” In López-Geta, J.A., de Dios Gómez, J., de la Orden, J.A., Ramos, G., and Rodríguez, L., eds., Tecnología de la Intrusion de Agua de Mar en Acuíferos Costeros: Países Mediterráneos. Instituto Geológico y Minero de España, Madrid.Google Scholar
Basar, T., and Olsder, G.J. 1999. Dynamic Noncooperative Game Theory. Philadelphia, PA: SIAM (Society for Industrial and Applied Mathematics) Series in Classics in Applied Mathematics.Google Scholar
Brozovic, N., Sunding, D., and Zilberman, D. 2006. “Optimal Management of Groundwater in Space and Time.” In Dinar, A. and Zilberman, D., eds., Frontiers in Water Resource Economics. New York: Springer.Google Scholar
Cardenas, J.C., Stranlund, J.K., and Willis, C. 2002. “Economic Inequality and Burden-Sharing in the Provision of Local Environmental Quality.” Ecological Economics 40(3): 379–395.CrossRefGoogle Scholar
Dörfliger, N. 2003. “The State of the French Mediterranean Coastal Aquifers.” In López-Geta, J.A., de Dios Gómez, J., de la Orden, J.A., Ramos, G., and Rodríguez, L., eds., Tecnología de la Intrusión de Agua de Mar en Acuíferos Costeros: Países Mediterráneos. Instituto Geológico y Minero de España, Madrid.Google Scholar
Efron, B., Hordan, R., Jolivet, E., Yahi, N., and Saporta, G. 2001. Le Bootstrap et Ses Applications. Paris: CISIACERESTA Editions.Google Scholar
Fischbacher, U. 2007. “Z-Tree: Zurich Toolbox for Ready-Made Economic Experiments.” Experimental Economics 10(2): 171–178.CrossRefGoogle Scholar
Giordana, G.A. 2008. “Wealthy People Do Better? Experimental Evidence on Endogenous Time Preference Heterogeneity and the Effect of Wealth in Renewable Common-Pool Resources Exploitation.” LAMETA Report No. DR2008-10, University of Montpellier I, Montpellier, France.Google Scholar
Giordana, G.A., and Montginoul, M. 2006. “Policy Instruments to Fight Against Seawater Intrusion in Coastal Aquifers: An Overview.” Life and Environment 56(4): 287–294.Google Scholar
Giordana, G.A., and Willinger, M. 2009. “Fixed Instruments to Cope with Stock Externalities: An Experimental Evaluation.” In List, J. and Price, M., eds., Handbook of Experimental Economics and the Environment. Cheltenhan, UK: Edward Elgar Publishing.Google Scholar
Günay, G. 2003. “Seawater Intrusion in Coastal Aquifers of the Mediterranean Coast of Turkey.” In López-Geta, J.A., de Dios Gómez, J., de la Orden, J.A., Ramos, G., and Rodríguez, L., eds., Tecnología de la Intrusion de Agua de Mar en Acuíferos Costeros: Países Mediterráneos. Instituto Geológico y Minero de España, Madrid.Google Scholar
Hardin, G. 1968. “The Tragedy of the Commons.” Science 162(3859): 1243–1248.CrossRefGoogle ScholarPubMed
Herr, A., Gardner, R., and Walker, J. 1997. “An Experimental Study of Time-Independent and Time-Dependent Externalities in the Commons.” Games and Economic Behavior 19(1): 77–96.CrossRefGoogle Scholar
Lancaster, T. 1990. The Econometric Analysis of Transition Data. New York: Cambridge University Press.CrossRefGoogle Scholar
Levhari, D., and Mirman, L. 1980. “The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution.” Bell Journal of Economics 11(1): 322–334.CrossRefGoogle Scholar
Levhari, D., Michener, R., and Mirman, L. 1981. “Dynamic Programming Models of Fishing: Competition.” American Economic Review 71(4): 649–661.Google Scholar
Libecap, G. 2008. “Open-Access Losses and Delay in the Assignment of Property Rights.” Arizona Law Review 50(2): 379–408.Google Scholar
Mason, C.F., and Phillips, O.R. 1997. “Mitigating the Tragedy of the Commons Through Cooperation: An Experimental Evaluation.” Journal of Environmental Economics and Management 34(2): 148–172.CrossRefGoogle Scholar
Moxnes, E. 1998. “Overexploitation of Renewable Resources: The Role of Misperceptions.” Journal of Economic Behavior and Organization 37(1): 107–127.CrossRefGoogle Scholar
Osés-Eraso, N., Udina, F., and Viladrich-Grau, M. 2008. “Environmental Versus Human-Induced Scarcity in the Commons: Is Our Response the Same?” Environmental and Resource Economics 40(4): 529–550.CrossRefGoogle Scholar
Ostrom, E. 1999. “Coping with Tragedies of the Commons.” Annual Review of Political Science 2: 493–535.CrossRefGoogle Scholar
Ostrom, E., Gardner, R., and Walker, J.M. 1994. Rules, Games, and Common-Pool Resources. Ann Arbor, MI: University of Michigan Press.CrossRefGoogle Scholar
Prentice, R.L., Williams, B.J., and Peterson, A.V. 1981. “On the Regression Analysis of Multivariate Failure Time Data.” Biometrika 68(2): 373–379.CrossRefGoogle Scholar
Reinganum, J., and Stokey, N. 1985. “Oligopoly Extraction of a Common Property Natural Resource: The Importance of the Period of Commitment in Dynamic Games.” International Economic Review 26(1): 161–173.CrossRefGoogle Scholar
Walker, J., and Gardner, R. 1992. “Probabilistic Destruction of Common-Pool Resources: Experimental Evidence.” The Economic Journal 102(414): 1149–1161.CrossRefGoogle Scholar