EXPLOITING A LOCAL COMMON: EGOISTIC VS. ALTRUISTIC BEHAVIOR

The paper analyzes the exploitation of a local common where the behavior is steered by altruism rooted in social norms. The analysis is illustrated by using the Gordon-Schäfer model of a fishery. We start by reviewing the standard results when all exploiters are purely egoists; i.e., when own utility depends only on own profit. Under the assumption of identical harvesting efficiency for all owners, we then introduce social norms and find the consequences for the resource utilization and welfare under various degrees of altruism. It is demonstrated that more altruism generally leads to less harvesting effort, less economic overexploitation of the resource stock, and increased resource rent. In a next step, we open up for differences in harvesting technology. It is shown that a high degree of altruism, in addition to a large efficiency gap among the owners, restricts the possibility of an exploitation scheme where all owners participate in the harvesting activity. The possibility of a two-channel efficiency improvement as a result of more altruism is also demonstrated.