appropriation equilibrium. Thus, if the institutional setup allows for sanctions or for communication, there is less appropriation in common-pool resource problems and higher voluntary contributions in public goods situations. Even though it is our main purpose in this chapter to show that the approach is able to account for the seemingly contradictory evidence of common-pool resource experiments, we believe the developed arguments are very general and likely to extend beyond the lab.
In the next section, we briefly outline the basic structure of our approach and recently developed fairness models. Then we apply our model to the standard common-pool resource game and discuss the theoretical predictions in light of empirical findings. We also provide propositions for a common-pool resource game with sanctioning opportunities as well as a discussion on the role of communication in the presence of reciprocal preferences. The subsequent section contains a comparison of common-pool resource results to those arrived in public goods games. The final section provides the conclusion.
A large body of evidence indicates that fairness and reciprocity are powerful determinants of human behavior (for an overview, see e.g., Fehr and Gächter, 2000b). As a response to this evidence, various theories of reciprocity and fairness have been developed (Rabin, 1993; Levine, 1998; Bolton and Ockenfels, 2000; Fehr and Schmidt, 1999; Falk and Fischbacher, 1999; Dufwenberg and Kirchsteiger, 1998; Charness and Rabin, 2000). These models assume that—in addition to their material self-interest—people also have a concern for fair outcomes or fair treatments. The impressive feature of several of these models is that they are capable of correctly predicting experimental outcomes in a wide variety of experimental games. Common to all of these models is the premise that the players’ utility depends not only on their own payoff but also on the payoff(s) of the other player(s). This assumption stands in sharp contrast to the standard economic model according to which subjects’ utility is based solely on their own absolute payoff.
Some of the models mentioned are based on the notion that people care for fair outcomes (Bolton and Ockenfels, 2000; Fehr and Schmidt, 1999). Other models are based on the assumption that people evaluate the fairness of others’ action in terms of the kindness of the intentions that triggered the action (Rabin, 1993; Dufwenberg and Kirchsteiger, 1999). Intention-based fairness models capture an important aspect of what has been called procedural fairness by some authors (e.g., Lind and Tyler, 1988). A third class of models combines outcome-based and intention-based notions of fairness (Falk and Fischbacher, 1998; Charness and Rabin, 2000). The experimental evidence (see, e.g., Blount, 1995; Falk et al., 2000a) indicates that subjects do not only sanction because they want to achieve fair outcomes but that the motive to punish unfair intentions is also a major deter-