Identifying factors influencing exploitation strategies and cooperation in commons dilemmas under threshold uncertainty : Evidence from a laboratory experiment

Abstract: I employ a laboratory experiment to examine behavior of user groups in commons dilemmas under uncertainty about a potential abrupt change in the resource renewal rate (threshold uncertainty). In this experiment, 87 subjects, randomly assigned to groups of three to four subjects, take anonymous individual harvest decisions over an unknown number of rounds while communication is allowed. Threshold uncertainty is captured in the experimental design as follows: Subjects are shown the resource dynamics of two different scenarios. While the resource dynamics of scenario A follows a logistic growth function, the regeneration rate of scenario B drops drastically below a certain resource stock size, or threshold. Subjects know they either play scenario A or B (with equal probability), but they do not know which. The primary finding is that user groups respond to threshold uncertainty in a precautionary manner. This contrasts previous experimental evidence that environmental uncertainty increases exploitation but points to recent findings in the field arguing that a threat can trigger cooperative behavior resulting in less cases of over-exploitation. The certainty of the threat, however, seems to matter as well as other variables, like if cheating occurred or not. As predicted, groups with higher trust levels are more likely to cooperate.