Non-Parametric Tests of Behavior in the Commons

Commons problems present behavioral dilemmas, with tensions between individual and collective rationality. When users of a common-pool resource are not effectively excluded, the collective behavior of individuals pursuing their self-interests dissipates resource rents. We derive a non-parametric test of whether individuals' collective behavior in resource extraction is consistent with the canonical commons model. Our approach allows for an arbitrarily concave, differentiable production function of total inputs and for heterogeneous agents with arbitrarily convex, differentiable costs of supplying inputs. We extend the test to allow for sampling error and use metrics to define distance from the data to the model. Applying our approach to panel data of Norwegian commercial fishing vessels, we find the results of our test are consistent with economic intuition. Significantly, we find property rights reforms move firms away from Nash tragedy-of-the-commons behavior