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Keeping an Eye on Your Neighbors: Agents Monitoring and Sanctioning One Another In a Common-Pool Resource Environment

Casari, Marco and Plott, Charles R. (2000) Keeping an Eye on Your Neighbors: Agents Monitoring and Sanctioning One Another In a Common-Pool Resource Environment. Social Science Working Paper, 1072. California Institute of Technology , Pasadena, CA. (Unpublished)

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The role of a specific institution in avoiding a "tragedy of the commons" situation in a common pool-resource environment is studied experimentally. The resource users privately decide their own exploitation level and then, once the group outcome is revealed, can choose to select other individuals for inspection. At a cost, the inspector can view the decision of any individual. If the inspected individual has exploited the resource excessively, relative to a publicly known amount, a fine is imposed and paid to the inspector. The rules, called Carte di Regola, were modeled after an historical case of self-governed rural communities. The impact of the rules is a dramatic increase in efficiency over the no rule case but still less than 100%. As part of an attempt to understand the nature of the impact of the rules the paper focuses on models of individual agent’s choices. The patterns of results relative to the classical Nash model are similar to other experiments. The model does well, except for the fact that contributions to the public good are less than Nash equilibrium amount. However, when the environment is changed to allow sanctions, contributions above the Nash equilibrium are observed. This paradoxical “flip” in behavior is explained by a non classical model in which spite plays a role in preferences and in which agents are heterogeneous. The model of asymmetric, other regarding agents also does relatively well in predicting patterns of individual choices such as the choice to inspect and sanction others. Efficiency is improved along with the strength of sanctions and the patterns of individual choices are consistent with the non classical model.

Item Type:Report or Paper (Working Paper)
Additional Information:The financial support of the National Science Foundation and the Laboratory of Experimental Economics and Political Science is gratefully acknowledged. We are also deeply appreciative of the collaboration of Stephen Van Hooser who developed the software program and helped extensively with the experiments. Many thanks to Anthony Kwasnica, Alvaro Gonzalez Staffa, Leslie Title, Roberto Weber, Angela Hung, and Peter Coughlan for their suggestions and help in running the experiments. Thanks also to William Morrison, David M. Messick, and Giangiacomo Bravo for the suggestions, James Walker for providing a copy of the instructions of their experiment, and to Robert Moir for his contribution to Table 1. This work has benefited from the comments of the participants at the 1999 ESA annual meeting, at a seminar at the University of Trento, Italy, and at the 2000 IASCP conference. The usual disclaimer applies.
Group:Social Science Working Papers
Funding AgencyGrant Number
Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:1072
Record Number:CaltechAUTHORS:20170810-133619486
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80205
Deposited By: Jacquelyn Bussone
Deposited On:10 Aug 2017 21:43
Last Modified:03 Oct 2019 18:28

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