Experiments as a Tool of Verifying Efficiency of Implicitly Agreed-Upon Market Organizations

We analyse the possibility of an experimental study of the efficiency of market institutional structures. In the paper “On the new institutionalism of markets: the market as an organization” by R. Richter, the implicitly agreed upon market organization is regarded as a Nash equilibrium of a game between potential market participants. The solution of such coordination problem is not necessarily Pareto-efficient but could be efficient given assumptions of New Institutional Economics (i. e. could be NIE-efficient). This framework can be very helpful as a descriptive tool used to explain the persistence or transition of market institutions, but in can be difficult to be verified empirically.Economic experiments have been successfully applied to analyse market institutions and to compare their efficiency. In the paper, we demonstrate how this methodology could be used to analyse the “spontaneous” market organizations reached as a tacit agreement in a coordination problem. We also advocate that economic experiments can be a very useful tool to verify the efficiency of such institutions

ZAWODNOŚĆ PAŃSTWA W ROZWIĄZYWANIU PROBLEMU DÓBR WSPÓLNYCH - NA PRZYKŁADZIE WSPÓLNEJ POLITYKI RYBOŁÓWSTWA UNII EUROPEJSKIEJ

The tragedy of the commons occurs when too many users extensively use public goods, such: common pastures, fisheries, roads, etc. This phenomenon can be analyzed as a subcategory of the ‘free riding’ problem which causes that the market coordination of producing public goods is usually inefficient. However, as it is shown in the paper (particularly basing on the UE fisheries policy), defining strong property rights to common resources (and allowing to trade these rights) may be the effective solution of the tragedy of the commons.Tragedia dóbr wspólnych pojawia się gdy, zbyt wielu użytkowników ekstensywnie korzysta z dóbr publicznych takich jak: wspólne pastwiska, łowiska, drogi, itd. Na gruncie teorii ekonomii zjawisko to można zaliczyć jako pewną subkategorię tzw. problemu „jazdy na gapę”, którego cechą szczególną jest to, że powoduje on zawodność rozwiązań rynkowych w odniesieniu do wytwarzania i alokacji dóbr publicznych. Jednakże w artykule pokazano (w szczególności na przykładzie polityki rybołówstwa UE), że skutecznym rozwiązaniem tego problemu może być zdefiniowanie silnych praw własności do dóbr wspólnych i umożliwienie swobodnego handlu tymi prawami

WYTWARZANIE DÓBR PUBLICZNYCH A PROBLEM "JAZDY NA GAPĘ"

The free-riding phenomenon is of utmost importance to the economists as its occurrence makes it difficult for the markets to produce and allocate public goods effectively. It is especially significant in the case of non-exclusive goods, i.e. in the example where it is impossible or very costly to exclude anybody from consuming the given good. The intensity of free-riding leads to the problems in financing the public goods and makes it often necessary to introduce some costly systems of control. The paper presents the main results of studies dedicated to the economic significance of the free-riding phenomenon. These include both the theoretical (different systems of financing the public projects, different institutional solutions of managing the public goods) and empirical (the results of the experiments) studies.Zjawisko "jazdy na gapę" (ang. free riding) skupia uwagę ekonomistów, ponieważ jego występowanie prowadzi do istotnych błędów w optymalizacyjnym działaniu koordynacji rynkowej w zakresie wytwarzania i alokacji dóbr publicznych. Zjawisko to może być poważnym problemem gospodarczym, szereg dóbr publicznych ma bowiem kluczowe znaczenie dla dobrobytu społecznego

WYTWARZANIE DÓBR PUBLICZNYCH A PROBLEM "JAZDY NA GAPĘ"

Zjawisko "jazdy na gapę" (ang. free riding) skupia uwagę ekonomistów, ponieważ jego występowanie prowadzi do istotnych błędów w optymalizacyjnym działaniu koordynacji rynkowej w zakresie wytwarzania i alokacji dóbr publicznych. Zjawisko to może być poważnym problemem gospodarczym, szereg dóbr publicznych ma bowiem kluczowe znaczenie dla dobrobytu społecznego

Rising temperatures advance the main flight period of Bombus bumblebees in agricultural landscapes of the Central European Plain

Funder: Poznan University of Life SciencesAbstractThis study examined shifts over a 35-year period in the phenology of the four most important bumblebee species (Bombus terrestris, B. lapidarius, B. pascuorum and B. hortorum) in Central Europe. The species showed similar temporal trends, significantly advancing components of their main flight period in association with rising temperatures such that, for example, mid-dates of the main flight period advanced by 10–23 days over the study period. Drivers of this change differed between the four species. Trends in, and drivers of, the timing of first queens, first workers and first males were less consistent. Aspects of the phenology of the least common species, B. hortorum, were up to a month earlier than the other species and climatic effects less clear cut. There were some suggestions of differences between species trends. These results stress the importance of considering changes and drivers of change for the Bombus family on a species-specific basis with the need to pay more attention to the life history traits of the study organisms.</jats:p

The evaluation of the effectiveness of the common fisheries policy of the European Union in the context of the overfishing problem. An institutional perspective

In 1968 in the magazine “Science” a biologist G. Hardin presented the problem of “the tragedy of commons” in relation to the over-exploitation of natural goods [Hardin, p. 162], as a result of which a substantial part of them could be irrevocably destroyed. This article discusses these issues on the example of more and more frequent collapses of European marine fisheries. The Common Fisheries Policy (CFP) has been carried out by the European Union basically since the 70s of the twentieth century. The main objective of the CFP is providing long-term sustainable fishing and hence preventing the collapse of European fisheries. So far the CFP has been mainly based on setting catch limits − so called TACs − and then allocating TACs to the particular EU member states. The purpose of this article is to formulate answers to the two following questions: 1. Is the current CFP (as well as the adopted institutional arrangements) adequately matched, ie. does it effectively counteract the problem of overfishing? 2. If not, what solutions can increase the efficiency of management of marine fish resources, through eliminating (or at least delaying) the problem of more and more common collapse of European fisheries? The first part of this article presents some predictions derived from the neoclassical theory of public goods. In this part there are explanations of the mechanism of overfishing as a result of the lack of adequate incentives to reduce fishing. Afterwards, the Common Fisheries Policy of EU (and its subsequent reforms) is analyzed in more detail. In particular, the highly technocratic nature of this policy is shown. In addition, the ineffectiveness of the CFP (in its present form) is demonstrated, as evidenced by the following data: •• approximately 88% of fish stocks in European waters are overfished (the world average is around 25%) and about 30% of them have exceeded the level enabling the rebirth of stocks (so they are practically run-down); •• the majority of EU fishing fleets is too big (it is estimated that in some cases up to 80%) and unprofitable or operates at breakeven. The EU fleets overcapacity is driving overfishing. The last part of the work shows the meta-analysis of 11.135 commercial fisheries worldwide [Costello et al. 2008]. This analysis gives empirical evidence that more effective solution would be to introduce individual transferable quotas (ITQs) as a basic tool of fisheries management systems. In the conclusions these assertions are supported by the selected practical experiences from European fisheries. These experiences also show that the implementation of ITQs reduces the size of the fishing fleets, increases their profitability, reduces the problem of overfishing and thus more effectively prevents the collapse of fisheries. The paper concludes that the inefficiency of the CFP results from: •• technocratic central planning system, which is vulnerable to lobbying and to the implementation of particularistic interests of the member states, and not focused on the long-term sustainability of fishing; •• weakness of the institutional incentives causing low liability of fleets for existing fish resources

Free-riding as a consequence of agents’ adjustments to the publicly observed social involvement in the creation of public good: the results of experimental research

W artykule opisano wyniki eksperymentów, w których badano wybory podmiotów sekwencyjnie dokonujących składek na wytwarzanie dobra publicznego. Opierając się na uzyskanych danych, skonstruowano model opisujący decyzje takich podmiotów jako efekt reakcji na ogłaszany publicznie poziom przeciętnej, społecznej kontrybucji. Obserwacje życia gospodarczego oraz wyniki eksperymentów laboratoryjnych pokazują, że poziom wpłat na dobro publiczne obniża się w kolejnych okresach decyzyjnych. Jest to zazwyczaj tłumaczone rosnącą frustracją kontrybutorów, wynikającą z obserwacji niekooperacyjnych zachowań innych członków danej społeczności. Opisane w pracy wyniki doświadczeń laboratoryjnych, których istotą było manipulowanie informacją o przeciętnym poziomie społecznej kontrybucji, pokazują, że to twierdzenie jest tylko częściowo prawdziwe, ponieważ za obserwowany wzrost skłonności do „jazdy na gapę” odpowiada zarówno (opisana wyżej) frustracja, jak i racjonalna maksymalizacja własnych (krótkookresowych) korzyści.The paper describes the results of the experiments concerning sequential choices of economic agents, contributing to the creation of public good. As based on the collected data, a model which explains the agents’ decisions as a function of publicly revealed average social contribution was constructed. Previous experiments and practice have shown that the average contribution of agents falls in the subsequent periods, which is typically explained as a consequence of rising agents’ frustration, resulting from the observation of the non-cooperative behavior of other community members. The results described in this paper demonstrate that this is only partially true, as the increasing individual willingness to a free-ride is also observed in the situation when participants are misinformed about the growing level of the average social contribution. The paper concludes that an increasing tendency to free-ride is motivated by adjustments to average social contribution, as well as by the individual urge to maximize the short-term payoff

“Free riding” as a consequence of an agent’s adjustments to the publicly observed social involvement in the creation of the public good: the results of experimental research

The paper describes the results of the experiments concerning sequential choices of economic agents, contributing to the creation of the public good. As based on the collected data, a model which explains the agents’ decisions as a function of publicly revealed average social contribution was constructed. Previous experiments and practice have shown that the average contribution of agents falls in the subsequent periods, which is typically explained as a consequence of rising agents’ frustration, resulting from the observation of the non-cooperative behaviour of other community members. The results described in this paper demonstrate that this is only partially true, as the increasing individual willingness to a free-ride is also observed in the situation when participants are misinformed about the growing level of the average social contribution. The paper concludes that an increasing tendency to free-ride is motivated by adjustments to average social contribution, as well as by the individual urge to maximize the short-term payoff