The wisdom of sustainable communities in the digital era: the case of efficient energy management
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The document discusses a model of cooperation in energy management between different types of resource users (cooperators and defectors). It examines how fairness norms and different levels of monitoring (perfect vs local) impact the evolution of cooperation over time using game theory. The model shows that cooperation can be sustained if the proportion of cooperators is large enough and monitoring prevents excessive free-riding, but cooperation is less stable if defectors can disguise themselves or the resource faces uncertainty.
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The wisdom of sustainable communities in the digital era: the case of efficient energy management
- 6. Factors of success in resource management (after Pretty 2003, Ostrom 2007 and Ostrom, forthcoming) Resource System Social System Clarity of system boundaries Number of users Size of resource system Norms, Rules, Social Capital (incentives/sanction) Resource unit mobility Relations of trust Productivity Connectedness in networks and groups Storage capacity Resource Dynamics/ Predictability
- 14. Extraction Levels Adapted from Sethi & Somanathan 1996 Efficient Total Effort Level Static Nash Total Effort Level Total Costs of Effort Total Production <
- 15. Equity – driven Cooperation Payoff: Utility: Net Average Product “ equity” Proportion cooperators Community benefit fn Excludable cooperation benefits
- 16. Interactions of resource users Note: payoffs are dependent on effort and state of resource Case 1 Perfect Monitoring Case 2 Local Monitoring C D C D C D C D
Editor's Notes
- Hardin’s paper had a strong influence; for long time it was believed that CPR should be regulated by the government or privatized Communication: in face-to-face discussions participants tend to discuss what they all should do and build norms Currently there is much discussion on community-based management (but it only works in certain conditions) Privatization = internalization of externalities Often modeled with prisonner’s dilemma
- Without top down enforcement or privatization, e.g. local community-based management, global commons such as climate Multitude of factors (empirical studies in forestry, irrigation, fisheries, Ostrom 1990)
- Is it stable when resource dynamics change? ABM
- Researchers have found a non-linear relationship between the number of users and self-organization. Small groups are frequently unable to undertake costly activities while transaction costs are higher for large groups. The impact U1 on self-organization also depends on its relationship to size of the resource system ( RS3 )
- Game theoretic approach
- Resource extraction guided by fairness norms (based on a commonly agreed upon level of sustainable resource extraction) Norm of restraint and norm of fairness (that everybody follows the norm of restraint), failure to obey the rules is a violation of a social norm “punished” by ostracism Integration of resource dynamics with evolutionary game or learning dynamics
- We never think about the labor needed for the production of the good itself, but only about the labor needed to extract the resource which is then used in production Total effort = sum of individual efforts
- Omega (fC) increasing in fC; first derivative >0 The fairness norm: Failure to follow the norm of restraint as everybody else is “punished” by refusal of help which exerts a material damage on the defector that is proportional to the difference in payoffs
- Monitoring Updating based on comparison of payoffs Full information versus local information
- Mention the x and y axis labels
- Initial conditions and path dependence