Fachbereich 9

School of Business Administration and Economics

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Endogenous Benefit Distribution in Public Good Games (PGG)

We aim to study the effect of self-governance on the level of cooperation in PGG in comparison to exogenously imposed rules. In real life, groups often establish themselves rules that govern their interaction in social dilemmas. One example is successful CPR management which is organized by resources users (e.g. Ostrom, 1992). A key issue for cooperation in such settings is the decision on how to allocate the benefits; i.e. the intra-group distribution rule. Another example are payments for ecosystem services, where benefit distribution may be endogenously determined by group members themselves. A question which arises is, if a rule that is externally imposed could become inferior to another distribution rule that is chosen by the group itself. To study this, we will make use of a laboratory experiment and will allow for two distinct benefit rules, namely equal allocation of benefits and proportional allocation (i.e. proportional to opportunity cost of conservation). We futher will vary the possibility of the rule being externally imposed or chosen by the group itself (e.g. such as through a majority voting). The results of this study are expected contribute to a more effective design of PES policies.

Contact persons in our team are Adriana Bernal Escobar and Prof. Dr. Stefanie Engel.