Article

Regulatory instruments to protect the commons: An experimental investigation

Stefan Ambec, Alexis Garapin, Laurent Muller, Arnaud Reynaud, and Carine Sebi

Abstract

In a laboratory experiment we test three regulations imposed on a common-pool resource game with heterogeneous users: an access fee and subsidy scheme, transferable quotas and non-transferable quotas. We calibrate the game so that all regulations improve users’ profits compared to free-access extraction. We compare the regulations according to five criteria: resource preservation, individual profits, profit difference, Pareto-improvement from free-access and sorting of the most efficient users. One of the main findings is that, even though it performs better in sorting out the most efficient subjects, the fee and subsidy scheme is not more profitable than tradable quotas.

JEL codes

  • C91: Laboratory, Individual Behavior
  • Q28: Government Policy
  • Q38: Government Policy

Replaces

Stefan Ambec, Alexis Garapin, Laurent Muller, Arnaud Reynaud, and Carine Sebi, Comparing Regulations to Protect the Commons: An Experimental Investigation, TSE Working Paper, n. 09-100, October 23, 2009.

Reference

Stefan Ambec, Alexis Garapin, Laurent Muller, Arnaud Reynaud, and Carine Sebi, Regulatory instruments to protect the commons: An experimental investigation, Environmental and Resource Economics, vol. 58, n. 2, June 2014, pp. 219–244.

Published in

Environmental and Resource Economics, vol. 58, n. 2, June 2014, pp. 219–244