Abstract
We study the effectiveness of costly rewards in mitigating excess extraction in a standard Common Pool Resource (CPR) game experiment. We implement two treatments. In the first, rewards are a pure transfer from one player to the other. In the second, the benefits of receiving a reward are higher than the cost of providing it. Referring to the latter as “net positive” rewards, we observe that these are used more frequently than transfer rewards, and that, unlike transfer rewards, they are effective in sustaining cooperation in the CPR game.
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JEL Classification C72, C92, D74
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Open Access This is an open access article distributed under the terms of the Creative Commons Attribution Noncommercial License ( https://creativecommons.org/licenses/by-nc/2.0 ), which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.
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Vyrastekova, J., van Soest, D. On the (in)effectiveness of rewards in sustaining cooperation. Exp Econ 11, 53–65 (2008). https://doi.org/10.1007/s10683-006-9153-x
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DOI: https://doi.org/10.1007/s10683-006-9153-x