The Endogenous Evolution of Common Property Management Systems

Abstract

Traditional co-management of common property resources involves stakeholders contributing knowledge and ideas about rules for access and extraction, which are analyzed and implemented by the regulator. We examine an emerging alternative system, in which self-identifying clubs of users are allocated a share of a total allowable extraction, that they manage with considerable autonomy. When multiple clubs concurrently extract under different self-selected rules, users gravitate toward more profitable regulations in subsequent seasons, putting evolutionary pressure on less profitable systems. We show experimentally that strong individual property rights, and the efficiencies associated with them, emerge endogenously from this process. A taste for competition among some individuals limits realized efficiency, but not extensive adoption of individual rights. Thus, regulators need not directly implement strong individual rights to achieve their benefits; regulators may instead assign a collective property right and provide a self-governance pathway toward management that supports better outcomes.