SFB 303 Discussion Paper No. B - 278

Author: Gardner, Roy, Michael R. Moore, and James M. Walker
Title: Racing for the Water: Laboratory Evidence on Subgame Perfection
Abstract: This paper examines strategic behaviour in the context of a dynamic common-pool resource game with a unique symmetric subgame equilibrium. Solving the model for its optimal solution and its subgame perfect equilibrium provides benchmarks for behavior observed in laboratory experiments. Baseline experiments, which portray a "rule of capture" for establishing ownership with group size equal to 10, achieve an average efficiency of 30%. Experiments that restrict entry, with group size equal to 5, increase average efficiency to 44%. Experiments applying a stock quota show more marked improvement in efficiency, averaging 54%. The stock quota come closet to producing data consistent with subgame perfection.
Creation-Date: February 1994
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