Does the allocation of property rights matter in the commons?

Abstract

A popular solution to the Tragedy of the Commons is to create private property rights to access the commons. If resource users care about the welfare of others, they may be unwilling to respect property rights regimes that lead to unfair or inequitable outcomes. We explore in a series of laboratory experiments whether it is possible to undermine the efficacy of property rights solutions through the allocation process. We find that both the extent to which property rights are enforced and how they are allocated significantly affect extraction and compliance. Our findings suggest that one of the most popular allocation methods is suboptimal: we observe that occasional enforcement and the proportional allocation of property rights is dominated by no enforcement and the equal or inverse allocation of property rights. Our results support the view that allocation matters for property rights solutions to the commons problem.