Non-parametric tests of output- and cost-sharing games

Abstract

The “tragedy of the commons” describes a variety of social dilemmas where total economic surplus is produced jointly from collective behavior and where individuals can strategically manipulate their share of the surplus. Recent research has shown that it is possible to test non-parametrically whether observed behavioral data are consistent with the canonical average return game, in which players share joint output in proportion to their inputs. We show that these tests extend to a much broader range of surplus sharing games. These games include equal-sharing of joint output and weighted averages of equal-sharing and proportionate sharing. They also include the average cost game, in which players share joint costs in proportion to the service provided them.