The Role of Rivalry

Abstract

Despite a large theoretical and empirical literature on public goods and common-pool resources, a systematic comparison of these two types of social dilemmas is lacking. In fact, there is some confusion about these two types of dilemma situations. As a result, they are often treated alike. In line with the theoretical literature, the authors argue that the degree of rivalry is the fundamental difference between the two games. Furthermore, they experimentally study behavior in a quadratic public good and a quadratic common-pool resource game with identical Pareto-optimum but divergent interior Nash equilibria. The results show that participants clearly perceive the differences in rivalry. Aggregate behavior in both games starts relatively close to Pareto efficiency and converges quickly to the respective Nash equilibrium.