Peer enforcement by ostracism in common pool resource management: An experimental analysis

Daan van Soest, CentER, Tilburg University

We explore the effectiveness of ostracism as a peer enforcement mechanism to
achieve socially optimal levels of resource use. If an agent's welfare does
not only depend on her return to CPR harvesting but also on the return to
another economic activity that requires bilateral cooperation, exclusion
from this alternative economic activity (by withholding cooperation) can be
an effective sanctioning device to prevent overharvesting of the CPR. This
dependence on multiple types of (economic) activity that require cooperation
in one form or another, is almost a defining characteristic of a community.
We develop an experiment which allows us to compare resource extraction
behavior by community members to that of a group of individuals who interact
with respect to CPR use only. We find that indeed CPRs are managed more
efficiently by communities than by otherwise independent groups of

Date: 14 October-00 0000