Provision versus Appropriation in Symmetric and Asymmetric Social Dilemmas

[Author Affiliation]James C Cox, * Experimental Economics Center and Department of Economics, 14 Marietta Street NW, Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA 30303, USA; E-mail: jccox@gsu.edu; corresponding author .Elinor Ostrom, [dagger] Founder of the Vincent and Elinor Ostrom Workshop in Political Theory and Policy Analysis, Indiana University, Bloomington, IN 47405, USA, and the Center for the Study of Institutional Diversity, Arizona State University, Tempe, AZ 85287, USA. Deceased.Vjollca Sadiraj, [double dagger] Experimental Economics Center and Department of Economics, 14 Marietta Street NW, Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA 30303, USA; E-mail: vsadiraj@gsu.edu .James M Walker, § The Vincent and Elinor Ostrom Workshop in Political Theory and Policy Analysis, Department of Economics, Indiana University, Wylie Hall 105, Bloomington, IN 47405, USA; E-mail: walkerj@indiana.edu .[Acknowledgment]Helpful comments and suggestions were provided by an anonymous referee. Financial support was provided by the National Science Foundation (grant numbers SES-0849590 and SES-0849551).1. IntroductionSocial dilemmas characterize settings in which a divergence exists between expected outcomes from individuals pursuing strategies based on narrow self-interest versus groups pursuing strategies based on the interests of the group as a whole. A large literature in several disciplines studies specific manifestations of social dilemma situations (Axelrod 1981; Gautschi 2000; Marshall 2004; Heibing, Yu, and Rauhut 2011). Two prominent areas in the economics literature are public goods games and trust games. These are typically surplus creation games in which the central question is whether free riding or absence of trust leads to an opportunity cost that a potential surplus is not created nor provided for a group. For example, in the one-period voluntary contributions public good game reported by Walker and Halloran (2004, table 2, p. 240), decision makers on average failed to create 47% of the feasible surplus.1 In the investment (or trust) game reported by Berg, Dickhaut, and McCabe (1995, figure 2, p. 130), decision makers on average failed to create 48% of the feasible surplus.2The ultimatum game is a well-known surplus destruction game. In a typical game, the entire surplus available to the two players is destroyed if the responder rejects a proposed split. In the seminal ultimatum game study reported by Guth, Schmittberger, and Schwarze (1982, tables 4, 5, p. 375), 10% of the feasible surplus was destroyed by "inexperienced" subjects. This figure increased to 29% with experienced subjects.3 Another, well-known example of a surplus destruction game is appropriation from a common-pool resource. Walker, Gardner, and Ostrom (1990, table II, p. 208) report data for a multiple-decision-round setting where players, on average, over-appropriated to the point of destroying the entire available surplus from the common pool, consistent with the outcome referred to as "the tragedy of the commons."4An open empirical question is whether social dilemmas are more serious when related to under-provision or over-appropriation in comparable environments. In the field, and most prior laboratory studies, critical differences exist in the opportunity sets that make direct comparisons between provision and appropriation social dilemmas infeasible. We address the question by constructing three pairs of provision and appropriation games. The two games within each pair are payoff equivalent.In the appropriation game in a payoff-equivalent pair, the value of the total endowment is (i) strictly greater than the value of the total endowment in the provision game but (ii) equal to the maximum attainable total payoff in the provision game. …