Does Water Scarcity Lead to Overuse? Evidence from Field Experiments

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"This paper presents the results from economic field experiments that aim to explore the behavioral responses of socio-economic agents to exogenous changes in resource availability. Subjects in the experiment are rural water users in Colombia that participated in a common pool resource (CPR) experiment in which the levels of the resource vary along the different stages of the game. In the first stage of the experiment all subjects played a baseline experiment with a high level of resource availability. In the second and third stages, the experimentalists exogenously changed the resource size. The results suggest that users take some time to reduce their extractions at stages where the size of the decreases moderately, but immediately extract more when the resource decreases to a size in which they can fully deplete it. Also, we show that experiencing a decrease in the size of the resource can accentuate rent-seeking behavior once the size of the resource rebounds. Lastly, we observe that the behavior of subjects at the specific rounds where the size of the CPR changes is mostly conditioned by whether the subjects have experienced a similar shock previously in the game."



common pool resources, water management, scarcity, experiments