Commons as a risk-management tool : theoretical predictions and an experimental test

Marielle Brunette (1) , Philippe Delacote (1) , Serge S. Garcia (1) , Jean-Marc Rousselle (2)

1 LEF - Laboratoire d'Economie Forestière
2 LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée

The impact of the safety-net use of Common-pool resources (CPR) on the individual investment into and extraction from the commons is analyzed in this paper. Agents of the community first choose to invest in their private project and in the CPR; second, they choose how much to extract from their private project and the commons. The model compares two types of riskmanagement tool: CPR as risk-coping and risk-diversification mechanisms. It also compares two types of risk: risk on a private project and risk on CPR investment by other community members. The theoretical predictions are empirically tested with experimental economics. At this end, we propose an original CPR game composed of two periods, an investment one and an extraction one. Our result clearly shows that risk reduction in the private project unambiguously decreases investment in the CPR, while it does not impact CPR extraction. We also show that a risk-coping strategy is well understood as more flexible and influenced by the outcome in terms of private project yield.

Mots clés: deforestation; experimental economics; common-pool resource; common-pool resource game

Domaines: Gestion des risques [q-fin.RM]

Marielle Brunette, Philippe Delacote, Serge S. Garcia, Jean-Marc Rousselle. Commons as a risk-management tool : theoretical predictions and an experimental test. 2. International Conference: Environment and Natural Resources Management in Developing and Transition Economies, Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne (CERDI). FRA., Oct 2012, Clermont Ferrand, France. ⟨hal-01072298⟩