Essays on Individual Behavior in Social Dilemma Environments: An Experimental Analysis

Abstract

"In this study, individual level behavior is investigated in the context of computer assisted voluntary contribution mechanism public good (VCM) provision experiments and common pool resource (CPR) appropriation experiments. Previous studies of these environments have concentrated on aggregate outcomes and have found, on average, aggregate outcomes fall between the predictions of the models based on privately rational agents and socially rational agents.

"In the VCM provision experiments, 43% of the subjects behave consistently with a predictive model based on private rationality (Nash) and 21% of the subjects behave consistently with a predictive model based on social rationality. In the CPR appropriation experiments, 74% of the subjects behave consistently with a predictive model based on private rationality and 5% of the subjects behave consistently with a model based on social rationality. Both of these results help to explain why the aggregate outcomes fall between the privately and socially rational model predictions. The third essay investigates subject forecasting behavior in the CPR provision environment. Here, subjects tend to efficiently use scarce information revealed through lagged forecast error, but their forecasts are biased. This result is not consistent with rational expectations forecasts. Subject forecast behavior is better described by a Bayesian point estimate updating model iv with an updating weight approaching one on prior beliefs. This outcome is consistent with the observed failure of subjects to converge to an equilibrium outcome, in the CPR experiments."