The tension between private benefits and degradation externalities from appropriation in the commons

Abstract

This experimental study examines behavior in a linear public goods game with an appropriation frame where we vary the value of individual benefits and the group losses from appropriation. Parallel to the literature on public goods provision, individual appropriation decreases with the marginal damage to the group that occurs through appropriation and increases in the private benefit from appropriation. In addition, we examine a novel set of decision situations where individual benefits and group damages change proportionately, as to hold the marginal per capita return constant. Individual responses to these proportionate changes are heterogeneous but on average, appropriation levels do not change significantly. These results are robust to two experimental designs, a one-shot menu-design where subjects make multiple choices and a complementary set of sessions where participants make a single decision in a one-shot game.