Enforcing Compliance with Voluntary Agreements in the Absence of Strong Institutions: An Experimental Analysis

Todd L. Cherry, Appalachian State University, Department of Economics
David M. McEvoy, Appalachian State University, Department of Economics

The background for this project is international environmental agreements (IEAs) which can be understood as agreements surrounding public goods problems of particular natural resources. This project addresses the question of how compliance with such agreements can be enforced. The researchers propose to investigate this through laboratory studies. In the first stage of the games proposed, players can decide whether or not to join an agreement. Players who join pay a deposit. In the second state, players make contributions to the public good, and if a player complies with the agreement, his deposit is refunded (proportionally). The experimental design varies key parameters of the environment (e.g., whether all the subject have the same or different costs if they fail to comply with the agreement.) This work may contribute to understanding in the context of the perennial issue of solving for public goods resource problems regarding the regulatory environment which surrounds them, particularly in the area of international agreements.