Please use this identifier to cite or link to this item:

Bonus and penalty in common pool resource dilemmas under uncertainty

Authors Rapoport, Amnon
Au, Wing Tung
Issue Date 1999-06
Source Marketing Working Paper Series ; MKTG 99.141
Summary In a sequence of studies, Budescu, Rapoport, and Suleiman investigated a class of common pool resource (CPR) dilemmas characterized by the presence of both strategic uncertainty and environmental uncertainty about the size of the CPR. We extend this research--both theoretically and experimentally--in two different ways. In the bonus CPR dilemma, a bonus is given to the agent(s) who request the least; and in the penalty CPR dilemma, a penalty is imposed on the agent(s) who request the most. Under equilibrium play, we show that the bonus treatment decreases total group request, whereas the penalty treatment increases it. Our experimental results do not support this prediction. Rather, both treatments increase the rate of provision, and the penalty treatment is more effective in reducing individual requests than the bonus treatment.
Language English
Format Working paper
Files in this item:
File Description Size Format
mktg99141.pdf 2357332 B Adobe PDF