Common property in the trust game: Experimental evidence from Bulgaria
| Published date | 01 January 2016 |
| Date | 01 January 2016 |
| DOI | 10.1177/0951629814568400 |
| Author | Eric A Coleman |
| Subject Matter | Articles |
Article
Journal of Theoretical Politics
2016, Vol.28(1) 27–43
ÓThe Author(s) 2015
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DOI: 10.1177/0951629814568400
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Common property in the
trust game: Experimental
evidence from Bulgaria
Eric A Coleman
Department of PoliticalScience, Florida State University, USA
Abstract
The extent of human cooperation depends on the institutional arenas wherein people interact.
Scholars from the Ostrom school have been particularly interested in how behavior in common
property institutions differs from private property. Using a model of reciprocal motivations, I
hypothesize that common property institutions elicit less cooperation thanprivate property insti-
tutions in post-Communist Bulgaria. To investigate this hypothesis, this article reports on a series
of experiments that examine the effects of common and private property in the trust game. The
results indicate that common property institutions in Bulgaria elicit less cooperation than private
property.
Keywords
Collective action; common property; experiment
1. Introduction
Common-pool resources (CPRs) pose collective action dilemmas. While the initial
analysis of CPR problems outlined by Hardin (1968) was relentlessly pessimistic
about the prospects for overcoming the collection action dilemma internally,
Ostrom (1990) and her colleagues have demonstrated that people often create
effective local common property institutions to deal with these problems (Persha et
al., 2011). Nonetheless, this work also points out that local institutions are not a
panacea for CPR dilemmas; sometimes local common property increases
Corresponding author:
Eric A Coleman, Departmentof Political Science, Florida State University, 543 Bellamy,PO Box 3062230,
Tallahassee, FL 32303-2230.
Email: ecoleman@fsu.edu
cooperation and sometimes it fails to do so (Ostrom and Nagendra, 2006; Ostrom
et al., 2007). Furthermore, while considerable effort has been devoted to cataloging
such institutions and testing their effects (Coleman, 2009; Persha et al., 2011), we
still know little about why some societies harness the benefits of common property
while others cannot.
This article investigates whether there is a fundamental difference in cooperation
when people interact within common or private property regimes. The experiment
used here focuses on the effects of assigning initial endowments as common or pri-
vate property for the well-known trust game (Berg et al., 1995). In the standard
private property trust game a first mover makes a decision that can create a surplus
to be shared with a second mover. The experimenter triples each token that the
first mover sends to their partner. The second mover is given full ownership and
full authority over the distribution of the first mover’s investment and the resulting
surplus.
1
The common property trust game is the inverse of the private property
trust game (Cox et al., 2009). In this treatment the initial endowment is assigned
jointly to the two players. The first mover has the option of withdrawing tokens
from a joint fund and destroying the surplus. Each token the first mover withdraws
reduces the joint fund by three tokens. From the remaining fund the second mover
then decides how much to give the first player.
This article investigates behavior in the common and private property trust
game with adult subjects in Bulgaria. I hypothesize, and the analysis finds, that
common property reduces both first and second player cooperation. These results
confirm the theoretical predictions of revealed altruism theory (discussed below).
Prior research investigating these games has produced mixed results (Cox et al.,
2009; Cox and Hall, 2010). The particular Bulgarian context helps explain why
cooperation with common property is much lower than with private property.
2. Theory
How will subjects behave in the private and common property trust games? To
examine this question one must consider revealed altruism theory (Cox et al.,
2008). This theory assumes that subject preferences depend on the distribution of
earnings that result from the game, the generosity of actions by a first mover to a
second mover (Axiom R), and whether these acts overturn the status quo distribu-
tion of endowments (Axiom S). This latter point (Axiom S) distinguishes between
acts of commission—actions that overturn the status quo—and acts of omission—
actions that preserve the status quo (Cox and Hall, 2010).
The crucial distinction between the private and common property trust games,
from revealed altruism theory, is the distribution of endowments in the status quo
(before any actions are taken). In the private property trust game the status quo
endowment places each player with 10 tokens. If the first player cooperates, then
they take an act of omission (upset the status quo) by sending tokens to their part-
ner. However, in the common property treatment, the first player cooperates when
they omit an act by not removing any tokens from the joint fund (thus preserving
the status quo). The status quo in the common property game is the most generous
28 Journal of Theoretical Politics 28(1)
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