What Do People Bring Into the Game? How Norms Help Overcome the Tragedy of the Commons

Abstract

"Contemporary economic theory is one of the more successful, empirically verified, social science theories to explain human behavior. It does best, however, in the settings for which it was developed the exchange of goods and services in an open, competitive market. The theory is based on a theory of goods, an institutional mechanism, and a model of human behavior. When the goods involved are not easily excludable and rivalrous, individuals tend to use nonmarket institutions. In these settings, the model of the individual (homo economicus) no longer generates empirically verifiable predictions. Governing and managing renewable, common-pool resources (CPRs) in an economically and ecologically sustainable manner is a problem where economic theory does not generate clear predictions supported by empirical evidence in experimental or field settings. In public good experiments, for example, instead of contributing nothing to the provision of a public good, as is predicted by neoclassical theory, individuals tend to contribute between 40 to 60 percent of their assets in a one-shot game."