Abstract
The Institutional Analysis and Development (IAD) literature finds that Nash equilibrium predictions are empirically falsified in the social dilemmas that arise in community-level natural resource management problems. However, Nash equilibrium is not the only solution concept within noncooperative game theory. Here we demonstrate the power of Correlated Equilibrium (CE) to explain lotteries for the allocation of fishing sites as enduring community-level natural resource management institutions. Such CE-implementing lotteries are procedurally fair, equitable, and increase total expected fishery value.This modeling approach clarifies two further sets of relationships. It reveals the nature of the interdependence between the size and spacing of fishing sites and (a) the in-use characteristics of fishing gear, as well as (b) the degree of formalization of property rights and the structural features of the natural resource-management institution. When appropriately applied, noncooperative game theory offers a powerful explanatory complement to the IAD literature on community-level natural resource management.
Highlights
The importance and effectiveness of community-level institutions for the management of natural resources is widely recognized
The institutional analysis and development (IAD) literature finds that Nash equilibrium predictions are empirically falsified in the social dilemmas that arise in community-level natural resource management problems
We demonstrate this explanatory power within the class of community-level natural resource management (NRM) institutions featuring an annual lottery for the allocation of fishing sites
Summary
The importance and effectiveness of community-level institutions for the management of natural resources is widely recognized. We argue that with tailoring and calibration of game-theoretic model structure to specific human-environment systems, noncooperative game theory offers a powerful and under-appreciated explanatory complement to the IAD literature We demonstrate this explanatory power within the class of community-level natural resource management (NRM) institutions featuring an annual lottery for the allocation of fishing sites. The lessons of Elinor Ostrom’s work and of the IAD literature spawned from it are apt, but crucial: community-level institutions for NRM arise out of local, particularistic, often interdependent details, exploiting and being tied to specific features of the local ecology, geography, technology, and social and political structures This remains the case when seeking to apply noncooperative game theory to explain the emergence and persistence of community-level institutions for NRM.
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