Individual Response, Information, and Intergenerational Common Pool Problems

Many inter- and intra-generational environmental issues can be modeled as common pool resource (CPR) problems. While economic theory predicts overuse of the CPR, in real life we find examples of individual overuse as well as individual conservation. Employing a multi-period, depletable resource experiment, we test for heterogeneity in withdrawals from a CPR. Heterogeneity suggests differences in underlying preferences. While we cannot directly observe preferences, we do identify statistically significant individual characteristics such as age, gender, and political and religious affiliation associated with withdrawal levels. In these experiments groups and individuals, on average, under-utilized the resource, but approximately 16% of the time groups depleted the resource prior to the terminal period. We also find informational effects. These results suggest that effective environmental policy should accommodate heterogeneous preferences. A “one-size-fits-all” policy will be efficient only if the population composition is such that over-consumption choices of some individuals are offset by the conservation choices of others.