An Experimental Study of a Common Property Renewable Resource Game in Continuous Time
We experimentally study behavior in a common property renewable resource extraction game with multiple equilibria. In the experiment, pairs of subjects competitively extract and consume a renewable resource in continuous time. We find that play evolves over time into multiple steady states, with heterogeneous extraction strategies that contain components predicted by equilibrium strategies. We find that simple rule-of-thumb strategies result in steady-state resource levels that are similar to the best equilibrium outcome. Sensitivity of aggressive strategies to the starting resource level suggests that improvement in renewable resource extraction can be attained by ensuring a healthy initial resource level. Our experiment thus provides empirical evidence for equilibrium selection in this widely used differential game, as well as evidence for the effectiveness of a resource management strategy.
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