Collective versus Random Fining: An Experimental Study on Controlling Ambient Pollution

This paper presents an experimental study oftwo different pollution compliance games:collective vis-à-vis random fining as ameans to regulate non-pointpollution. Using samples from both Costa Ricancoffee mill managers and Costa Rican students,we find that the two games perform equivalentlybut, although they lead to efficient outcomesthrough Nash play in the majority of cases, theobserved frequency of Nash play is lower thantheoretically predicted. Moreover, we rejectthe hypothesis that managers and studentsbehave equally. Off the equilibrium, managerstend to over-abate, whereas students tend tounder-abate. This result suggests theimportance of considering subject pooldifferences in the evaluation of environmentalpolicies by means of experiments, particularlyif those policies involve certain forms ofmanagement decisions. Copyright Kluwer Academic Publishers 2004