Common Pool Ressources

Question 1

Prisoners Dilemma

Answer 1

• noncooperative game
• complete information
  . Each player has a dominant strategy in a sense that the player is always better off choosing this strategy – to defect.
• When both players choose their dominant strategy, they produce an equilibrium that is pareto-inferior.

NONCOOPERATION: Communication among the players is forbidden, impossible or simply irrelevant.
COMPLETE INFORMATION: All players know the full structure of the game tree and the payoffs attached to outcomes.

Question 2

Example for Noncooperative Game

Answer 2

Pasture that can feed up to L animals
Without control, a single defect has the best payoff
both defecting has the worst.

Prisoners Dilemma

Question 3

What is Hardins view on population?

Answer 3

Argues that Bentham’s goal is impossible: Greatest good for the greatest number of people

• -> Mathematically (vNM)
• -> Biologically (Maintenance Calories, Work Calories)
• Most rapidly growing populations are also the most miserable –> Difficulty of defining the maximum population size

Pollution as a Consequence

Question 4

Hardins Population Problem

Answer 4

Tragedy of the commons

> Freedom to breed is intolerable
Conscience is self-elimating
Recognition of necessity
Mutual Coercion

Question 5

How did Ostrom criticize noncooperative Game theory?

Answer 5

Participants in PD setting are regarded as prisoners
In real life people have freedom to arrange things themselves
–> Thigs assumed to be fixed in the model are not fixed in real life

> Leviathan as the only way

> Privatization as the only way
There shouldn’t be a simple dichotomy (successful CPR institutions are a mixture of public and private companies)

POLICY PRESCRIPTIONS AS METAPHORS (managing forests in developing countries)

Question 6

Gürerks Finding

Answer 6

1. Sanctioning Institutions: Provide the opportunity to punish norm violators
   - Punishment of defectors constitutes a second-order public good.
   - They are preferred over time
2. Non -sacntioning Institutions: Neither positive sanctioning (rewards) nor negative sanctioning is possible.
3. Freeriders: Non-contributing, in SI earn significantly less
4. High-contributors: Establish a culture of punishing in SI (in which they earn more than Freeriders)
5. Asymmetry of negative and positive Sanctions:

Positive applied to norm abiding individuals to preserve approval of cooperation

Negative applied to norm violators.

Question 7

How do we achieve high leverage?

Answer 7

Every individual pays a small cost but violators receive the full punishment

If punishing is for free it might become random and not achieve the desired behavior

Sanctioning norm arises as sanctioning becomes a second-order public good.

Question 8

Ostroms 8 Principles

Answer 8

1. CLEARLY DEFINED BOUNDARIES
   > Who takes from the CPr and its boundaries must be defined
   > First step in organizing collective action
   > Outsiders could reap without contributing (free-rider)
   > If demand for CPR is high, discount rate approaches 100% , with dominant strategy by appropriators being to overuse CPR
2. CONGRUENCE BETWEEN APPROPRIATION AND PROVISION AND LOCAL CONDITIONS
3. COLLECTIVE CHOICE AGREEMENTS
   > Appropriator participation in modifying operational rules
4. MONITORING & GRADUATED SANCTIONS
   > Monitors actively audit CPR conditions and behaviour
   > GS by other appropriators or officials or both
   > In robust institutions it’s done by members
   > Gradual enforcement with sanctioners knowing the appropriator’s circumstances more effective than recessive sanctions
5. CONFLICT RESOLUTION MECHANISM
   > Appropriators and officials have rapid access to low-cost arena to resolve conflicts
   > Mechanism for discussion
6. MINIMAL RECOGNITION OF RIGHTS TO ORGANIZE
   > External authorities do not challenge the appropriators own devised institutions
7. NESTED ENTERPRISES
   > Governance activities are organized in multiple layers of nested enterprises

Question 9

Quasi voluntary compliance

Answer 9

Tax scheme is a system in which most comply

1. is voluntary because one chooses to comply
2. “quasi” because if one doesn’t comply –> fined

Question 10

What ae the costs & rewards of monitoring?

Answer 10

Mostly costly to punisher while benefits are distributed over members

> Costs are low in many CPRs as a results of rules in play

Personal Rewards:

1) Status
2) Information

Question 11

Criticism on OStroms Principles

Answer 11

Power ist underestimated (of individuals)

• Dependence on Homogeneity/Heterogeneity –> her case studies are mainly homogenous groups

• Geographical Limits (Country borders i.e. Nile river, limiting cooperation)
• The type of government