Linking Appropriation and Provision of Public Goods Decisions Decreases Rate of Destruction of the Commons

Experimental studies of common pool resource (CPR) dilemmas are frequently terminated with collapse of the resource; however, there is considerable evidence in real-world settings that challenge this finding. To reconcile this difference, we propose a two-stage model that links appropriation of the CPR and provision of public goods in an attempt to explain the emergence of cooperation in the management of CPRs under environmental uncertainty. Benchmark predictions are derived from the model, and subsequently tested experimentally under different marginal cost-benefit structures concerning the voluntary contribution to the provision of the good. Our results suggest that the severity of the appropriation problem is significantly mitigated by the presence of an option for voluntarily contributing a fraction of the income surplus from the appropriation phase to the provision of the public good. 1 University of Minho and NIMA (Botelho and Pinto), Water Science and Policy Center, Department of Environmental Sciences, University of California Riverside (Dinar), and A. Gary Anderson School of Business Administration, University of California Riverside (Rapoport). e-mail: [email protected], [email protected], [email protected], [email protected]. This study was conducted while Botelho and Pinto were on sabbatical leave at the Water Science and Policy Center, University of California, Riverside, and the School of Business Administration, University of Arizona. 2 This study was conducted while Botelho and Pinto were on sabbatical leave at the Water Science and Policy Center, University of California, Riverside, and the School of Business Administration, University of Arizona.