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Time and uncertainty in resource dilemmas: equilibrium solutions and experimental results

Published online by Cambridge University Press:  14 March 2025

Anabela Botelho ,
Ariel Dinar ,
Lígia M. Costa Pinto  and
Amnon Rapoport
Anabela Botelho
Affiliation:
University of Minho and NIMA, Braga, Portugal
Ariel Dinar*
Affiliation:
Water Science and Policy Center, Department of Environmental Sciences, University of California, Riverside, USA
Lígia M. Costa Pinto
Affiliation:
University of Minho and NIMA, Braga, Portugal
Amnon Rapoport
Affiliation:
A. Gary Anderson School of Business Administration, University of California, Riverside, USA
*
[email protected]
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Abstract

Most common pool resource (CPR) dilemmas share two features: they evolve over time and they are managed under environmental uncertainties. We propose a stylized dynamic model that integrates these two dimensions. A distinguishing feature of our model is that the duration of the game is determined endogenously by the users’ collective decisions. In the proposed model, if the resource stock level below which the irreversible event occurs is known in advance, then the optimal resource use coincides with a unique symmetric equilibrium that guarantees survival of the resource. As the uncertainty about the threshold level increases, resource use increases if users adopt decision strategies that quickly deplete the resource stock, but decreases if they adopt path strategies guaranteeing that the unknown threshold level is never exceeded. We show that under relatively high uncertainty about resource size, CPR users frequently implement decision strategies that terminate the game immediately. When this uncertainty is reduced, they maintain a positive resource level for longer durations.

Keywords

Common pool resourcesSocial dilemmasUncertaintySustainability
Type
Original Paper
Information
Experimental Economics , Volume 17 , Issue 4 , December 2014 , pp. 649 - 672
Copyright
Copyright © 2014 Economic Science Association

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Footnotes

Electronic Supplementary Material The online version of this article (doi:https://doi.org/10.1007/s10683-013-9388-2) contains supplementary material, which is available to authorized users.

We thank the two reviewers and Associate Editor for constructive remarks. This study was conducted while Botelho and Pinto spent a sabbatical leave at the Water Science and Policy Center, University of California, Riverside, and University of Arizona. Botelho and Pinto thank the Fundação para a Ciência e Tecnologia for sabbatical scholarships SFRH/BSAB/1226/2012 and SFRH/BSAB/1159/2011, respectively.

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