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Abstract:
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"Contemporary policy analyses are frequently based on a presumption that those jointly using a common-pool resource (CPR) cannot themselves resolve collective action problems related to the CPR since individual rationality conflicts with social rationality. CPR situations are frequently portrayed as a Prisoner's Dilemma game, whose unique outcome is mutual defection. Individuals who seek to maximize their individual payoffs, according to this argument, fail to manage CPRs as effectively as they could if they could coordinate their actions.
"Empirical studies, however, show that some CPR users have been able to overcome problems of collective action. This anomaly of the standard theory of collective action applied to CPR situations stems from the fact that the incentive structures of individuals facing CPR situations are not well explained by standard theories. Standard theories: (i) lack detailed specification and justification of payoffs (ii) are usually static; and (iii) consider only one of the two main collective action problems in CPR situations - appropriation problems and provision problems.
"Drawing on the Institutional Analysis and Development framework and dynamic game theory, this study develops a new model of the incentive structure of CPR situations that clearly specifies and justifies payoffs, is dynamic, and considers both appropriation and provision problems at the same time. Due to the complexity of this game, a computer simulation using Mathematical program is used in solving this game. This new model enables us to explore the possibility of self-governing solutions to collective action problems in CPRs. The findings of this study demonstrate that appropriators can, under specified conditions, manage CPRs more effectively than predicted by earlier theories. Further, how key factors affect the possibility of self-governing solutions to collective action problems in CPRs is analyzed."
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