Behavioural Economics in Social-Ecological Systems with Thresholds

Behavioural Experiments in Social-Ecological Systems with Thresholds

Juan C. Rocha, Caroline Schill, Anne-Sophie Crepin & Therese Lindahl

@juanrocha

How does people behave when dealing with situations pervaded by threshold (uncertainty)?

Framed field experiment• 256 participants / 4 fishing

communities

• Largely depend on natural resources as main source of income

• History of regime shifts - critical transitions:

• Mangroves collapse (1980s -90s)

• Hypoxia events and fish deadlines

Recent hypoxia events - 2016

SeptemberJuly August Last week

A day of field work

• Dynamic game • Monetary incentives: 1 fish worth 500 Pesos • Communication allowed throughout the

game • Participants did not know the # rounds to

be played • Session lasted about 3 hrs • Average earnings = ~20k COP ~€ 5.50;

range: 3,000 - 40,000 COP (+ show-up fee of 15,000 COP), about a daily wage, paid privately at the end of the session

Experimental design: set-up and procedure

Earnings paid privately at the end

Communication allowed

Monetary incentives

STAGE 1: 6 rounds

For all groups the same, independent of treatment

Baseline

Dynamic common pool resource game

Start

STAGE 1: 6 rounds

For all groups the same, independent of treatment

Baseline

STAGE 2: 10 rounds

All groups start again with 50 resource stock units

Dynamic common pool resource game

Start

STAGE 1: 6 rounds

For all groups the same, independent of treatment

Threshold• climate event has happened

Baseline

STAGE 2: 10 rounds

All groups start again with 50 resource stock units

Dynamic common pool resource game

Start

STAGE 1: 6 rounds

For all groups the same, independent of treatment

Threshold• climate event has happened

Risk• long-lasting climate event might

happen, known probability (0.5)

Baseline

STAGE 2: 10 rounds

All groups start again with 50 resource stock units

Dynamic common pool resource game

Start

STAGE 1: 6 rounds

For all groups the same, independent of treatment

Threshold• climate event has happened

Ambiguity• long-lasting climate event might

happen, unknown probability

Risk• long-lasting climate event might

happen, known probability (0.5)

Baseline

STAGE 2: 10 rounds

All groups start again with 50 resource stock units

Dynamic common pool resource game

Start

STAGE 1: 6 rounds

For all groups the same, independent of treatment

Baseline• no change

Threshold• climate event has happened

Ambiguity• long-lasting climate event might

happen, unknown probability

Risk• long-lasting climate event might

happen, known probability (0.5)

Baseline

STAGE 2: 10 rounds

All groups start again with 50 resource stock units

Dynamic common pool resource game

Start

Visualisations

Monetary incentives

Decision cards

Result 1: there is a treatment effect at group level

Groups in the threshold, risk and uncertainty treatment achieved a higher average stock size over time.

Pairwise Wilcox text (Bonferroni adjusted)

BaselineRiskThresholdRisk0.00160--Threshold0.000161.00000-Uncertainty8.1e-110.017820.00041

Fishermen facing thresholds presented a more conservative behaviour on the exploration of the parameter space of

resource exploitation.

Buenavista

Las Flores

Tasajeras

Result 2: Treatment effect at individual level

• Threshold: • Base line = 20

• Treatments = 28

• Cooperation = (StockSize - Threshold / 4) - IndExtraction

• Are there fisher styles?

BuenavistaLasFloresTagangaLasFlores2.6e-11--Taganga0.00038<2e-16-Tasajera0.02236<2e-160.10150

Pairwise Wilcox text (Bonferroni adjusted)

Result 2: Treatment effect at individual level

• Threshold: • Base line = 20

• Treatments = 28

• Cooperation = (StockSize - Threshold / 4) - IndExtraction

• Are there fisher styles?

BuenavistaLasFloresTagangaLasFlores2.6e-11--Taganga0.00038<2e-16-Tasajera0.02236<2e-160.10150

Pairwise Wilcox text (Bonferroni adjusted)

Random effects panel model shows that treatment, place and time have significant effects on cooperation, but effect differs if at group or individual levels.

Taganga

What’s going on in these areas?

Lower education and older population

Dramatic changes?

Buenavista & Las Flores have experience more abrupt changes

Buenavista

Poorest, and they are on their own

Las Flores

Lots of cooperatives but weak cooperation

Concluding remarks• Fishermen facing (uncertain) thresholds

exhibit a more precautionary behaviour as a group

• Speculation collapse:

• groups come often from communities with higher livelihood diversification, lower resource dependence

• and strongly exposed to infrastructure development

• Higher noise on resource dynamics masks the relationship between fishing efforts and stock size encouraging a more explorative behaviour of fishing effort in real life.

Questions? e-mail: juan.rocha@su.se twitter: @juanrocha

slides: http://criticaltransitions.wordpress.com/

Experimental design of dynamic CPR game: communication of risk/ uncertainty

Risk Uncertainty

+ 8 of unknown colour

(Constant) probability of 0.5 that the event happens in following round

(Constant) probability range between 1/10 and 9/10 that the event happens in following round