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PDF
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Type:
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Working Paper |
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Author:
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Walker, James M.; Ostrom, Elinor; Gardner, Roy |
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Date:
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1989 |
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Agency:
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Workshop in Political Theory and Policy Analysis, Indiana University, Bloomington, IN |
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Series:
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URI:
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https://hdl.handle.net/10535/5376
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Sector:
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Theory |
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Region:
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Subject(s):
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common pool resources
rent seeking
modeling
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Abstract:
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"This paper examines the resource environment classified as common-pool resource. The intent is to highlight and more carefully
classify the specific forms of behavioral problems encountered in this
resource allocation environment, with an emphasis on the particular
allocation problem known commonly as 'rent dissipation.' We present
evidence from laboratory experiments designed to investigate the
robustness of theoretical models of rent dissipation in such
environments. Following the theoretical work of such authors as Scott Gordon (1954), we investigate the strength of theoretical models which predict that users of common-pool resources will appropriate units from the resource at a rate which exceeds the point at which marginal returns
equal marginal extraction costs. The logic of such models argues that
appropriators will ignore the production externalites of their own
appropriation and focus only on average returns from the resource.
Following this argument, appropriation will take place at a level in
which all rents are dissipated. Our experimental results present evidence from a behavioral investment environment designed to capture the key theoretical assumptions of the rent dissipation models. We offer evidence related to the extent of rent dissipation as related to subject experience in the environment, the form of the production technology of the common pool resource, and the size of the appropriation group."
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