Reducing Strategic Uncertainty Increases Group Protection in Collective Risk Social Dilemmas

Abstract

"Interrelated global crises - climate change, pandemics, loss of ecosystem services and biodiversity - pose risks that demand collective solutions. The dependence on some to take collective efforts to reduce risks for all (e.g., rural landholders flooding their land to reduce vulnerability to flooding in densely populated, urban areas downstream; or conservation of natural habitats by those living at wildlife boarders to reduce risk of zoonoses) coupled with the uncertainty about others' behavior complicates collective action. We extend the experimental collective risk social dilemma to consider that some individuals ('beneficiaries') cannot protect themselves and must rely on others ('providers') for collective protection. Our approach allows to disentangle the relevance of self-interest and uncertainty over the actions of others in explaining self-reliance (that is, only protecting oneself) by providers. In a pre-registered laboratory experiment (https://aspredicted.org/SXY_YVF) with 400 participants, we consider a repeated decision-environment with four treatment conditions, systematically varying the degree of strategic uncertainty: i) a baseline scenario with passive beneficiaries, ii) proportional arrangements where beneficiaries can send donations to compensate providers for collective solution efforts, thereby changing the Nash Equilibrium, iii) pledges allowing for non-binding commitments among both subgroups, and iv) reducing the problem to a single provider and single beneficiary. We hypothesize that all treatments with transfers will increase the likelihood of avoiding collective damages compared to the baseline scenario, with the single insider-outsider treatment resulting in the highest efficiency to avoid collective damages. Our findings show that reducing strategic uncertainty leads to more collective solutions, with more beneficiaries protected, less resources wasted, and lower inequality. Moreover, we show that institutions allowing beneficiaries to make transfers to providers of protection are highly effective in increasing reliance on collective solutions. Indeed, these transfer institutions are as effective as fully removing strategic uncertainty. Thus, we show that understanding the motivations for self-reliance in collective risk social dilemmas can help develop better institutions to enhance the use of collective, welfare-enhancing, solutions."