Providing Ecosystem Services When Outsiders Support Insiders.

Fonds zur Förderung der wissenschaftlichen Forschung (FWF).2019-2023.  PI: Esther Blanco

 

People

 

Natalie Struwe, PhD Student

 

Aida Guerrero, Research Assistant

 

Esther Blanco, PI 

 

Abstract

 

This project investigates the cooperation of two groups. The difference between the two groups is that the first group (we call them insiders) can take actions that benefit both groups. We call these prosocial actions that provide a public good. The second group (we call them outsiders) cannot take such actions. However, they can help the insiders by subsidizing their prosocial actions. For example, those who do not live or own land in a forest ecosystem (the outsiders), cannot directly make decisions on the status of the ecosystem. Only those who live in the forest (the insiders) can take actions to maintain or improve the ecosystem. Yet, the outsiders can still benefit from the public goods of biodiversity conservation, climate protection or watershed management that the forest generates. So, the outsiders could subsidize the insiders to take actions that improve the ecosystem.

 

In both groups, there is a tension between what is best for the individual and what is best for the group. It is costly to insiders to choose prosocial actions that improve the ecosystem. At the same time, it is costly to outsiders to subsidize the actions of the insiders. Broadly, we are interested in the decision making of outsiders to compensate insiders for their prosocial provision of public goods by using monetary payments, as well as the willingness of insiders to respond to the monetary payments and provide even greater levels of the public good.

More specifically, in this project, we will explore alternative ways and situations in which to implement the outsider’s compensations, working on ways to increase the prosocial actions of insiders. Broadly, we plan to study three questions. First, when and how do the rules for sharing subsidies among insiders affect their decisions to provide the public good and the decisions of outsiders to provide subsidies? Second, to what extent does competition among the insiders for subsidies increase their provision of the public good? Finally, how will cooperation among insiders and outsiders differ if the number of outsiders changes or the effort required of insiders to provide public goods changes?

 

We will address these topics using laboratory economic experiments. Experiments are particularly useful in studying the decision making of people in different decision environments resembling the real-world setting of interest. Because experiments provide a way for the experimenter to systematically vary the rules of decision-making and the incentives for alternative outcomes, they can generate (causal) evidence on the extent that changes in behavior are a result of variations in the rules and incentives.

 

RESEARCH OUTCOMES

 

Published Manuscripts (and in process of publication).

 

Competition Among Public Good Providers for Donor Rewards. (with Struwe, N. and Walker, J.M.). Under Review - Experimental Economics.

 

Why do outsiders make donations to public good providers? (with Struwe, N. and  Bogner, K) Minor Revisions - Book chapter in Behavioral Economics and the Environment, Routledge.

 

Substitution of social sustainability concerns under the Covid-19 pandemic. Accepted (with Baier, A., Holzmeister, F., Jaber-Lopez, T., and Struwe, N.)  Ecological Economics.

 

Long term effects of the Covid-19 pandemic on social concerns. 2021 (with Baier, A., Holzmeister, F., Jaber-Lopez, T., and Struwe, N.) Frontiers in Psychology.

 

Experimental evidence on sharing rules and additionality in transfer payments. 2021 (with Struwe, N. and Walker, J.M).  Journal of Economic Behavior and Organization, 188, pp. 1221-1247. https://doi.org/10.1016/j.jebo.2021.06.012  

 

Working Papers

 

Competition Among Public Good Providers for Donor Rewards. (with Struwe, N. and Walker, J.M.) Working Papers, Faculty of Economics and Statistics, University of Innsbruck, 2021, https://econpapers.repec.org/RePEc:inn:wpaper:2021-29

 

Can outsiders effectively incentivize public good provision? Experimental evidence on sharing rules and additionality requirements (Blanco, E., Struwe, N., Walker, J.M.) Working papers of the Faculty of Economics and Statistics, University of Innsbruck. https://econpapers.repec.org/paper/innwpaper/2020-22.htm

 

Substitution of social concerns under the Covid-19 pandemic. (Blanco, E., Baier, A., Felix, H., Jaber-Lopez, T., and Struwe, N.) Working Papers, Faculty of Economics and Statistics, University of Innsbruck, 2020,  https://econpapers.repec.org/paper/innwpaper/2020-30.htm

  

 

Presentations

 

IX Conference of the Spanish-Portuguese Association of Natural Resources and Environmental Economics (SPAIN). 03/09/2021. "The Role of Non-Binding Pledges in Social Dilemmas with Mitigation and Adaptation"

 

6th Workshop on Experimental Economics for the Environment, (AUSTRIA), 10/06/2021. "Competition Among Public Good Providers for Donor Rewards"

 

Annual Meeting of the Austrian Economic Association (NOeG) (AUSTRIA) 25/06/2021 "Experimental Evidence on Sharing Rules and Additionality in Transfer Payments"; "Substitution of social concerns under the Covid-19 pandemic".

 

20th Journées Louis-André Gérard-Varet - international conference in public economics, Marseille (FRANCE). 23/06/2021 "Experimental Evidence on Sharing Rules and Additionality in Transfer Payments."

 

The Ostrom Workshop Colloquium Series, Indiana University, Bloomington (USA).

16/10/2020 "Incentivizing Public Good Provision through Outsider Transfers: Experimental Evidence on Sharing Rules and Additionality Requirements".

 

5th Workshop on Experimental Economics for the Environment, (GERMANY), 2020.

Can Outsiders Effectively Incentivize Public Good Provision? Experimental Evidence on Sharing Rules and Additionality Requirements. Co-authors: Struwe, N. and Walker, J.M.

 

Other publications

 

Is coronavirus distracting us from other pressing social concerns? (Struwe, N., Blanco, E., Baier, A.) The Economics Observatory. https://www.economicsobservatory.com/is-coronavirus-distracting-us-from-other-pressing-social-concerns