Blog / Teaching with MobLab: Elinor Ostrom and the Commons
Elinor Ostrom is my favorite economist — though, as the political scientists at Duke made clear, “You can’t have her. She’s ours.” Let’s compromise: She is my favorite political economist. In 2009, Elinor “Lin” Ostrom was the first woman to win the Nobel Prize in Economics. She was awarded the Nobel for, “her analysis of governance, especially the commons.” The “commons” refers to a resource that can be used by several people, but each person’s use subtracts from what is available for the rest of the people. You can find examples of common pool resources from a well in the Old Testament (see Genesis 29:2-3), to fisheries, oil reserves, broadband internet, and more.Ostrom’s early work on the commons involved field research. She would investigate how different tribes or communities managed their common pool resource. In that research she would find that communities could devise rules for equitable and sustainable use of their resources. And, that if some people in the community violated rules of use there were consequences. In 2010 Elinor Ostrom spoke at the Social Dilemmas Conference. I was attending that conference at Rice University and I remember her recounting the following story (which is similar to the one from “Design Principles of Robust Property-Rights Institutions: What Have We Learned?”):"One of my own vivid recollections from doing fieldwork in the Middle Hills of Nepal during the 1990s was seeing an enclosed field with a domesticated cow in the center of a village. In response to my question as to what was happening here, my Nepali colleagues indicated that the enclosure was a kind of “cow jail.” When three adult members of the local farmer-managed irrigation system agreed that a member had not followed water harvesting or maintenance rules after receiving a verbal warning, they were authorized to bring a cow from the errant farmer’s fields to the village area. In an agricultural village, everyone knows who owns a cow. Thus, while the cow was grazing in the center of the village producing milk for the village council to distribute, all of the farmer’s neighbors were learning about the farmer’s nonperformance. Once the farmer had paid a modest fee for breaking the rules, the cow would be returned, so this second-stage sanction was not severe in the long run. Needless to say, however, most members of the irrigation system preferred to follow the rules rather than be embarrassed by this form of a graduated sanction."MobLab has three games that relate to these stories that I have shared here but today I will write about the Commons: Fishery game. In this game students operate a fishing boat on the sea and cast their nets to catch fish. There is a maximum capacity of fish in the sea and the fish population doubles at the end of each season. There are several fun manipulations that can be done with this game:First, the commons is fundamentally about having too few property rights. Because each person can fish the lake, graze the pasture, take the water, etc. there are incentives for each person to take the resources before the other person gets them all. This is akin to you and your sibling sharing a milkshake and trying to slurp it up before the other consumes it all. You can create perfect property rights by having students in the game be the only ship on the sea. This removes the incentive to consume quickly (unless they have a super high discount rate!). After running that game you can run it again with the standard group of four and have a fun conversation about how property rights provide incentives to consume at a more sustainable clip.Second, another important aspect of the commons is the role of covenants or agreements about how much to use the resource. In our games you can allow students to chat with each other within the game to make these agreements. Even though these covenants are cheap talk, in her own laboratory research Elinor Ostrom found that cheap talk improved cooperation and reduced tragedy in the commons, “A striking aspect of the discussion rounds was how rapidly the subjects, who had not had an opportunity to establish a well defined community with strong internal norms, were able to devise their own agreements and verbal punishments for those who broke those agreements.” (Ostrom, Walker, and Gardner, 1992, p. 410).Third, you can also manipulate whether the game is finite or indefinitely repeated. Cooperation is greater when people expect to receive a greater stream of benefits from future cooperation. This is the case with people who are in a community with each other over a long period of time. Early defection kills all the benefits people expect to receive over their lifetime.Related to the “cow jail” and the punishment aspect of governing the commons we have a different game, “Public Goods with Rewards and Sanctions”, but we can save the exposition of that game for a different time.