Sustainability as a dynamic game

Abstract

Sustainability is a fundamental concept in the environmental domain, but also in other domains, e.g., regarding personal health. Sustainability means using resources today in a way that does not compromise the availability of resources tomorrow. We propose and test a model that incorporates the essential features of sustainability. First, our Sustainability Game is dynamic in the sense that the actions played in each period have consequences for future periods. Second, there is a contribution threshold that must be reached in order to maintain the level of resources, while some use of resources can be absorbed. Third, it incorporates that the temptation to over-use resources is strong when more than one individual is involved. We first derive equilibrium behavior analytically and then test these pre-registered predictions in the lab. Our main results are the following: (i) Theoretically and experimentally, strategic interaction reduces cooperative behavior and undermines sustainability. (ii) Theoretically and experimentally, lowering the threshold fosters cooperative behavior (i.e., contributing according to the threshold) and sustainability. Our results suggest that technological advancements that lower the threshold for sustainability and behavior change toward sustainability need not be viewed as alternatives, but rather as complementary.