The Social Organization of the Commons and Public Policy Design : A Social Network Approach

This paper analyzes the influence that social networks and the state of a public good or common property resource have on compliance with social norms in relation to a social dilemma. We find that equilibria where compliers and defectors coexist (partial cooperation) can be stable and are significantly more likely when social pressure exerted by compliers entails costs. Subsidizing the compliers’ costs of social pressure may impede equilibria based on partial cooperation. The analysis allows policymakers to compare the effectiveness of legal (e.g., fines or subsidies) and informal (e.g., network-oriented) enforcement policies. Likewise, the study determines the optimal design of policies for promoting cooperation. Furthermore, we show that cooperation is unlikely to prevail if the agents do not perceive the social dilemma as severe. The analytical framework is applied to the example of an aquifer in Spain