Farmers' cooperation to improve water quality under scientific uncertainty: A lab‐in‐the‐field experiment

Abstract

Cooperation amongst natural resource users is key to manage ecosystems sustainably and achieve environmental goals proposed by policy and regulations. This paper focuses on the impact that livestock farming can have on the quality of a water body and investigates farmers' willingness to cooperate to preserve water quality under two different sources of uncertainty and four different degrees of uncertainty. The first source relates to the level of water quality that must be guaranteed in a river catchment to avoid irreversible deterioration of aquatic ecosystems (threshold uncertainty, i.e. with catastrophic consequences). The second source relates to the financial losses that farmers will experience in the long run if they fail to cooperate (impact uncertainty). To this end, a lab‐in‐the‐field experiment was conducted with livestock farmers of Northern Ireland. A local public good game with threshold uncertainty was framed around an agri‐environmental scheme designed to create ungrazed buffer zones for water quality preservation. Results indicate that uncertainty generally hampers farmers' cooperation and the provision of information geared to reduce uncertainty enhances it. Impact uncertainty has a milder negative impact on cooperation than threshold uncertainty. Risk preferences and probability weighting do not influence cooperation, while loss aversion has an influence on cooperation.