Misperceptions of basic dynamics: the case of renewable resource management

Abstract

Previous laboratory experiments, using quite complex resource simulators, suggest that renewable resources are over-utilised because of a general tendency for people to systematically misperceive the dynamics of bioeconomic systems. Here, similar experiments with simplified simulators involving the management of reindeer rangelands are carried out. Sufficient information is given for the subjects to construct perfect mental models. Misperceptions persist for a simulator containing only the basic building block of all dynamic systems: one stock and two flows. Results deteriorate in a second treatment where a two-stock model is used. Compared to earlier studies using questionnaires, where subjects do not benefit from repeated outcome feedback, the experiments show that, even in these simple systems, information feedback is not sufficient to make up for misperceptions. Simulations are used to test two hypothesised decision rules: the optimal policy is rejected; a simple feedback rule is not. Altogether, the experiment and the simulations provide both a motivation for and an introduction to studies of system dynamics. Copyright © 2004 John Wiley & Sons, Ltd.Syst. Dyn. Rev. 20, 139-162, (2004) There are numerous examples of overexploitation and at times extinction of renewable resources, think of, for example, whales, forests and fish, as well as some reindeer pastures. A prominent theory for why this happens is the "tragedy of the commons" (Hardin 1968;Gordon 1954; and others back to Aristotle). However, overexploitation has also taken place for privately owned renewable resources and for shared resources with policies in place to tackle the commons problem. An alternative or supplementary theory for overexploitation is misperception of dynamics. Laboratory experiments show overinvestment and overutilisation even when the subjects (students and professionals) have full property rights and monetary incentives to behave optimally (Moxnes 1998a,b;. These results are consistent with experimental studies of other complex dynamic systems (e.g., Sterman 1989a,b;Funke 1991;Brehmer 1992), showing, with few exceptions, considerable deviations from normative standards.The laboratory experiments used thus far have been characterised by considerable complexity and ambiguity about model structure and parameters. Here we construct similar experiments, but reduce the complexity to a minimum. In the present experiments it is possible to reconstruct perfectly the underlying model and its parameters from the instructions. Consequently, 139 * Correspondence to: Prof E. Moxnes, Dept. of Information Science, University of Bergen, PO Box 7800, N-5020, Bergen, Norway. E-mail: Erling.Moxnes@ifi.uib.no Thanks to the editors and referees for valuable comments and to the students for participating in the experiments and for ensuing discussions.

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“…For example, Moxnes (1998aMoxnes ( , 1998bMoxnes ( , 2000Moxnes ( , 2004 in experiments concerning renewable resources using simple dynamic systems has shown that humans have strong tendencies to over utilize and over invest resources. In experiments when subjects were asked to set reindeer quotas in a district where lichen has been severely depleted by preceding overgrazing, Moxnes (2004) shows that all subjects make an error of overexploitation. According to Moxnes (2004), the plausible explanation for this behavior is faulty "static correlation mental models" where humans fail to distinguish between stock (i.e.…”

“…In experiments when subjects were asked to set reindeer quotas in a district where lichen has been severely depleted by preceding overgrazing, Moxnes (2004) shows that all subjects make an error of overexploitation. According to Moxnes (2004), the plausible explanation for this behavior is faulty "static correlation mental models" where humans fail to distinguish between stock (i.e. accumulation) and flows (time derivatives) that cause the stock to change.…”