Managing common resources with potential abrupt ecosystem changes: Using experiments to evaluate policies.
Purpose
The purpose of this research project was to test and map the combined impact of potential large and abrupt ecosystem changes, so-called regime shifts, and institutional arrangements on the management of common pool resources (CPRs). In particular, we aimed to study how different instruments, e.g., quotas, uniform taxes and information perform to regulate CPRs with potential regime shifts. We also wanted to study how a price decrease may affect behavior and outcomes in these systems. To this end we have relied heavily on lab experiments complemented by surveys. Initially we also wanted to conduct field experiments with fishers in Norway and Sweden, in order to see to what extent the lab results also hold in field settings. This turned out to be more challenging than we anticipated. Fishers in Sweden and Norway are too scattered and have an opportunity cost for participating which is too high. To elicit knowledge and attitudes of fishers towards abrupt ecosystem changes and policy instruments we decided instead to rely on a survey that we sent out to fishers in Sweden.
When we analyzed the results of the lab experiments, indeed the different treatments showed significant differences. However, we also noticed that whether or not a particular group was able to sustainably manage the resource depended highly on group constellation. For example it depended on the participants’ individual understanding of the resource dynamics and whether or not the group members communicated and shared their individual knowledge because this in turn determined in the end what knowledge the group acted upon. We wanted to explore these social processes further and at the same time take advantage of the survey data we had (from the experiments and the survey). To this end we decided to develop Agent-Based Models (ABMs) as they allow for systematically testing explanations of behavior and to develop mechanisms-based explanations. With our ABMs we could then systematically explore the effect of different group constellations.
Three most important results
1) Regimes shifts can work as a trigger for communication, knowledge sharing and cooperation, which in turn results in more sustainable and efficient resource management. The extent to which user-groups communicate and cooperate is endogenous to the problem (treatment) they face. This contrasts previous results from experimental work on CPR systems where communication in itself is typically one of the treatments. Our results indicate that we need to consider how communication (and thereby cooperation) emerges in these systems as it will have a profound effect on outcomes.
2) The magnitude of the effect (mentioned above) depends on how the regime shift and its consequences are presented. For example, comparing the case where the regime shifts is visualized with a figure with the case where there is no such visualization (in other respects treatments are identical) shows that the effect decreases substantially.
3) Cooperation does not necessarily imply sustainable resource use; cooperative groups over- or under-exploited, or even depleted, the shared resource. Developing management strategies in complex ecological environments requires, beside cooperation, knowledge and approaches to deal with the lack of ecological understanding. To what extent user groups manage to exploit the resource sustainably thus depends on the distribution of this knowledge and the confidence users have in this knowledge in the group. This will in turn influence users’ willingness to share and willingness to learn and consequently the overall knowledge of the group.
New research ideas generated by the project
Our work has pointed us to research needs regarding the micro-foundations underpinning collective action and sustainable resource management. For one we realize the need for understanding the mechanisms of individual- and social learning and the interplay of these processes with social and ecological uncertainty - all aspects that we hope to further dive into while extending our ABM in the future.
We have also realized that generating less naïve characterizations of the world and of human behavior is an enormous, but critically important task. To this end we have extended our collaboration also to neuroscientist at Karolinska Institutet. The plan is to write a joint proposal for a research project aiming to combine cutting-edge techniques from behavioral economics and neuroscience to better understand how and why humans respond to resource dynamics and social interactions associated with group use of and group decision making about resources.
International links
The research project has had close ties to researchers at the School of Sustainability and Center for Behavior Institutions and the Environment at Arizona State University, in particular to Professor Marty Anderies. He has contributed with advice and inputs throughout the entire research project. Also Lindahl participated in a workshop organized by the group in Arizona, and was chosen as guest editor for the special issue in ecology and Society (Advancing the understanding of behavior in social-ecological systems: results from lab and field experiments), springing out of that workshop. The link to the Arizona group is now even stronger as Professor Anderies and Dr. Lindahl are jointly leading one of Beijer’s five research programs – Behavior, Economics and Nature Network (BENN).
BENN has had several meetings and workshops during the project period and the network now extends widely both in terms of geography (e.g., Colombia, US, Norway, Sweden, Netherlands, Thailand, South Africa, Uruguay, Costa Rica) as well as in institutional and research background (e.g., behavioral economics, environmental and resource economics, neuroscience, psychology, ecology, mathematics). Professors Simon Levin, Princeton University, Karine Nyberg, Olso University, and Jason Shogren, University of Wyoming serve as the international advisory group of BENN
Informational contributions outside academia
Therese Lindahl
• Public seminar, Almedalen, Visby Sweden, July 2015. Är nudging det nya svarta inom policy? (Is nudging the new black in policy?). Invited speaker and panelist.
• Public conference, Klimathuset, Conference on climate organized by the Swedish society for nature conservation, Kulturhuset, Stockholm October 2015. How to spark motivation for action. Invited panelist.
• Public lecture series at the Royal Coin Cabinet, Stockholm, April 2016. Beteende och miljö (Behavior and the environment). Invited speaker.
• Psychology16 conference, Växjö, Sweden. April 2016. Samtal om att hantera klimathotet (A talk about how to handle the climate threat). Invited speaker and panelist.
• Scientific council member for Fores, which involves 1-2 meetings per year.
• Member of reference group for ESO, expertgruppen för studier i offentlig ekonomi. 2016.
Anne-Sophie Crépin
• Public lecture and panel discussion, Institutet för Framtidsstudier, Stockholm. 2016. Vetenskap, teknologi och mänsklighetens framtid, siscussion on the book: Here Be Dragons: Science, Technology and the Future of Humanity, by Olle Häggström, Oxford University Press. Invited panelist.
• Dialogue on OECD:s Environmental Performance Review of Sweden Swedish Ministry of the Environment, Rosenbad, June 2014. Invited Panellist.
Two most important publications
Probably the most important will be the manuscript that is still unpublished where we compare and synthesis the results of all lab experiments. But speaking of peer reviewed currently published work:
1) Schill C., F. Wijermans, M. Schlüter, and T. Lindahl (2016), Cooperation Is Not Enough - Exploring Social-Ecological Micro-Foundations for Sustainable Common-Pool Resource Use PLoS ONE, 11(8):e0157796.
The ABMs we developed mimics the experimental setup we used in our experiments. Four agents interact to manage a CPR with path-dependent resource dynamics; they differ in their knowledge, their confidence in this knowledge, and in their social preferences (we used survey data to elicit these distributions) and they learn through their interaction with the resource over time and with the other group members (we can test different mechanisms). See also result 3 above.
2) Lindahl, T., A.-S. Crépin, N. Orescovic, (2016b). Playing safe: The role of quotas to avoid ecosystem regime shifts. In A. Botelho, F. Munoz-Garcia, R.A. Matthew, C. Harron, K. Goodrich, B. Maharramli, E. Nizkorodov, T. Bryant, A. Botelho (Eds.), WSPC Reference of Natural Resources and Environmental Policy in the Era of Global Change Volume 4: Experimental Economics. World Scientific. Vol. 4, pp. 121–150.
In this study we fail to confirm our theoretical prediction which states that unregulated systems will perform equally or worse with respect to inefficiencies stemming from over-exploitation. The experimental results reveal instead that regulated systems on average are associated with lower efficiency, stemming from both from under- and over-exploitation. We also find that cooperative groups are less likely to cross the critical threshold, and that groups in the unregulated treatment is more likely to be cooperative. We also find that cooperative groups do not exhibit group rationality (maximizing joint returns), which is probably due to an imperfect knowledge of the system.
Publication strategy
Because of the interdisciplinary focus of this project we have aimed for either broader interdisciplinary journals (e.g., PLoS ONE and Ecology and Society), or outlets and journals more linked to the specific topics: behavior, experiments, and CPRs (e.g., the WSPC reference volume, journal of environmental and resource economics). The published papers as well as the computational model generated by this project have been published with open access and for papers coming out (still unpublished) we will make sure they are also published with open access.