In the absence of strong institutional rules within a group governing the usage of shared resources, the decisions of individuals to engage in resource extraction may create suboptimal outcomes for the entire group -- this outcome, when it occurs, is commonly called the "tragedy of the commons." Forests, fisheries and water represent some of the best-known examples of resources whose management is vulnerable to this dynamic, wherein an individual's choice to extract a given amount of resource may be made without internalizing the negative impacts that this decision will have on the resource's ability to replenish itself in order to facilitate sustainable extraction in the future.
The establishment of private property rights over the common resource is a classic mechanism by which the tragedy of the commons may be avoided. Property rights guarantee private resource owners the rents accrued from future extraction of the resource, and thus these owners do not face strong incentives to immediately exploit the resource out of fear that someone else will if they do not. However, in many cases "privatizing the commons" may be infeasible because of difficulties in defining or enforcing formal property rights. Nonetheless, even when resources are not formally privatized groups are often able to effectively define rules governing a commons.
The exploration of the effectiveness of different institutional rules and organization forms in different commons environments has generated a very important literature in the past half-century which has generated valuable advice pertaining to how policymakers should both identify and respond to the tragedy of the commons in its various manifestations. These insights have been applied to deal with the management of resources such water in southern California, crab populations from the Chesapeake Bay to the Aleutian Islands, and most sorts of game wildlife.
The design in this proposal will shed light on how different levels of survival pressure may affect a group's ability to establish rules for commons management. A controlled laboratory experiment will be implemented wherein subjects will be given control of avatars in a naturalistic online environment. Subjects will acquire income by moving their avatars around within this environment and gathering resources; however, if resources are overharvested then they will replenish more-slowly and the group's overall income will be reduced.
In a previous experiment implemented in a similar environment, the establishment of institutions such as informal property rights and territoriality proved essential to effective commons management. However, this design introduces the additional notion that poor resource management may lead to the disruption of homeostatic equilibrium within avatars -- in essence, a failure to gather resources may lead to avatars becoming weak or dying. This process may also be hastened via avatars being able to directly attack one another.
Survival pressures will take the form of a requirement that avatars must gather resources at different rates in order to survive each period of the experiment. By examining multiple levels of pressure -- ranging from very low (avatars need to do very little gathering to survive) to very high (even under optimal management, not enough resources will be produced for all avatars to survive) -- data will be gathered concerning how this threat of avatar mortality directly impacts the institutions that groups implement in order to govern the common resource. It is hypothesized that increased pressure will make informal institutions much more fragile since tactical failures may lead to the deaths of avatars. In turn, this will lead to worse commons management and increased violence in this environment.
It is undoubtedly the case that for many individuals, ineffective commons management may lead not simply to marginally-diminished incomes but also to severe impoverishment and death. In the real world, high survival pressures may result in the collapse of informal institutions and outbreaks of violence. This design brings to bear the advantages of the controlled experiments by examining the direct impacts of survival pressure on commons management. The naturalistic environment being used allows for the collection of much-richer institutional data compared to previous designs that have examined similar issues. In doing so, this design aims to glean new insights into the conditions under which groups can effectively self-govern.
