Academic journal article Economic Inquiry

Common-Pool Resources with Free Mobility

Academic journal article Economic Inquiry

Common-Pool Resources with Free Mobility

Article excerpt

I. INTRODUCTION

To date, most of the experimental research on common-pool resources (CPR) has been concerned with the overexploitation problem within one community. Several studies as in Casari and Plott (2003), Visser (2006), and Fehr and Gachter (2000) emphasize that mutual monitoring and sanctions against excessive use and free riding can be welfare-improving in CPR and public good settings. Furthermore, Ostrom (1990) and others highlight the importance of clearly defined boundaries for successful self-governance in the commons. However, in-and-out population migration may be a significant factor in resource use across communities. Examples include international fisheries or pastureland under extensive grazing. The purpose of this study is to consider the effect of migratory pressure on such mobile commons. In this article, we relax the assumption of no entry and study how an agent's free mobility between communities affects resource use. Population migration is free in the Tiebout (1956) sense: we assume that agents' mobility is costless.

Our work differs from previous research in that it addresses the mobility issue by looking at multiple localities, each with a CPR under either sanctions or open access regime. We compare resource extraction behavior under different resource use regimes (sanctions vs. no sanctions) using laboratory experiments conducted in two countries: the United States and Mongolia.

Examples of commons with multiple locations are widespread in national and world economies. Extensive livestock production prevalent in Mongolia, Kyrgyzstan, Niger, and Mali relies on low-forage-value grassland, which requires movement of herders over large territories subsuming many localities. Similarly, fisheries around international waters involve resource use problems across many localities or even countries. For instance, pink salmon in the North East Pacific is harvested in Canadian, American, and Russian waters. Some localities may have regulations, such as sanctions to promote the efficient use of the resource, whereas others are still unregulated. The Alaskan salmon fisheries in Chignik were governed at certain times by a cooperative fleet that shared catch equally among members and at other times by an independent fleet in such a way that unregulated fishermen were free to join cooperatives as studied in Deacon, Parker, and Costello (2008). In New England, users move among separately managed resources such as groundfish, shellfish, and baitfish within single political jurisdictions.

To reflect the high-mobility aspect of such settings, we extend the existing experimental laboratory research on CPR to allow for two communities in which citizens are free to choose the place to extract the resource. In each community, there is a territory with resources for harvesting activity. We consider two possible community management regimes for each locality: (a) unregulated community with no rules toward the grazing activity and (b) decentralized sanctioning mechanism as studied in Casari and Plot (2003). We consider this sanctioning system as an example of an institution that has a historical precedence and that has been shown to restore the efficiency of the common properties in closed communities. The research questions are: How does free mobility affect the performance of the sanctioning system? If one locality is regulated and the other is not, would the sanctioning institution withstand the migratory pressure from the unregulated locality? How does the difference in a management regime affect agents' decisions on which locality to join? We address these questions in an experimental two-community CPR framework, where participants make decisions regarding the location to harvest and the harvesting level. Moreover, we compare the setting with exogenously imposed institutions to a setting where the institutions in each locality are chosen by majority voting. This comparison allows us to consider differences between representative democracy and direct democracy. …

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