تنظیمات توزیع درآمد و تغییرات نظارتی در معضلات اجتماعی

We present results from an experiment where we elicit preferences over regulatory policies of social dilemmas for small groups. These policy choices differ only in income distribution and are made after a common group experience of an unregulated social dilemma game. We model two policies: a traditional grandfathering allocation of pollution permits and an egalitarian public trust fund. We find a sizeable fraction of our participants favor the public trust, indicating that social preferences are not sufficiently expressed during the interactive social dilemma game.

Understanding distributional preferences is important when assessing the social welfare consequences of economic policies. Such preferences are receiving some attention in policy analysis, including those of social dilemma situations (IPCC, 2001), although it is not clear whether this attention merely reflects the self-interest of political actors or if it also reflects a concern for income to others. For example, some fishing communities confronted with new regulatory schemes using transferable permits experience contentious disputes over the distribution of quotas (Kaufmann et al., 1999, chapter 5). Further evidence of the potential importance of distributional concerns can be found by looking at solutions to distributional conflicts that communities devise. In irrigation and fishery commons, for example, appropriation rules stipulating equal usage are common, and sometimes lotteries have been used to assign rights to the most productive fishery spots (Schlager, 1994). In irrigation systems, users are often given equal time slots to extract water (Tang, 1994). When access rights in fishing commons are violated, they have sometimes been met with negative reciprocal acts resulting in property damage and, in some cases, even lives, with serious distributional consequences (Schlager). In all of these cases the externality generated affects only the group of users, implying that expressions of self-interest and distributional preferences are confounded. In other social dilemmas, such as pollution emissions, the externality has broader societal effects, perhaps making it harder to reach voluntary equitable agreements. Tradable pollution permits have become a popular regulatory approach to pollution emissions, generally leading to both environmental and economic efficiency (OECD, 2004, Isaac and Holt, 1999 and Cason and Plott, 1996), but the allocation of pollution permits has also generated controversy, leading to intensive lobbying by interested parties (Tietenberg and Johnstone, 2004). These controversies often revolve around distributional issues. Permit allocations generally have been made to incumbent firms, often according to some historic performance and needs, using so called grandfathering allocation schemes (Harrison, 2004 and Ellerman, 2004). An alternative to grandfathering is to auction off permits, thereby transferring the rents from permit holders to the government conducting the auction. One example of using auctions to assign permits is in Alaska, where concerns for the allocation of rents motivated the establishment of the Alaska Permanent Fund,1 and in particular its Permanent Fund Dividend program. The State of Alaska holds annual permit auctions for drilling rights and invests 25 percent of its auction revenues in a Trust Fund. The state then distributes a share of Fund investment earnings to every qualified Alaska resident each year.2 Following a trading approach, transferable permits have been proposed as a solution to excessive carbon emissions. Not surprisingly, the distributional consequences of such permits have generated debate at the national and international levels (Najam et al., 2003 and Bovenberg and Goulder, 2001). While the Climate Stewardship Act proposed in 2003 includes some concerns regarding the allocation of permit scarcity rents, other proposals, such as Sky Trust,3 go further and model a trust fund similar to that of the Alaska Permanent Fund. According to this proposal, carbon emission permits would be sold to companies and the income distributed to US citizens in the form of equal dividends. The US Congressional Budget Office (2000) evaluated such a redistribution mechanism as one of several ways in which the government can distribute revenues from permit sales. Policy proposals such as Sky Trust are based on the premise that preferences over the distribution of the scarcity rents of the licenses exist and that voters (and interest groups) care about the way in which the policy solution distributes these licenses. Recent experimental work on what have been termed social preferences offers many reasons to expect that this may be so. In a number of experiments, subjects have been found to be motivated not only by self-interest, but also by a concern for payoffs to others (Charness and Rabin, 2002). For example, social preferences may be based on unconditional distributional preferences (Bolton and Ockenfels, 2000 and Fehr and Schmidt, 1999), or on reciprocal motivations (Hoffman et al., 1994, Rabin, 1993 and Charness and Rabin, 2002). We hypothesize that support for programs such as Sky Trust depend upon more than self-interest, including distributional and reciprocal preferences. Demands for public fund dividend payments across all citizens imply that egalitarian outcomes are important. Reciprocity motivations may also be relevant if a grandfathering distribution is perceived to benefit agents who were the strongest contributors to the pollution problem in the past. Both motivations are consistent with the social preference literature, as well as with findings in the field where voluntary enforcement in common pool resource environments often involve both distributional considerations and reciprocity (Ostrom et al., 1994). Our focus is on individual preferences over the distributional implications of alternative social institutions or policies, and we use the term social preferences in this context to refer to preferences in that domain. We design an experiment to test for the presence of social preferences during a regulatory change in a social dilemma situation. Since political pressure in favor of trust funds may reflect either self-serving interests or fairness perceptions, we test for the presence of social preferences by removing any self-serving motivation from the policy choice. An important aspect of our experiment is that the initial income positions from which redistribution choices are made are endogenously generated through a common history of interactions rather than exogenously imposed by the experimenter. Since our interest is in assessing social preferences in situations where individuals face a regulatory change and therefore have a common history, it is important to recognize that social preferences in this context may reflect perceptions of the fairness of initial income positions. Hoffman and Spitzer (1985) and Hoffman et al. argue that the procedures used for assigning initial income positions in experiments may affect distributional choices; we expect initial positions to be particularly relevant in situations of regulatory change, such as in our experiment. Participants in our experiment first play an unregulated multi-round social dilemma game, followed by a task where they express distributional preferences over two regulatory solutions. Both of the solutions implement the socially optimal level of earnings, but differ in their distributional consequences. One distributes earnings in proportion to previous income shares, modeling a grandfathering allocation, and the other distributes earnings equally, like a trust fund approach. The design controls for a number of motivations that may influence regulatory choices in the field. These include preferences for efficiency, self-serving payoff increases, strategic uncertainty, and the distribution of income across self and others. This leaves motivations based on the distribution of income that excludes one's own earnings and motivations to reward and punish based on perceptions of fairness during the unregulated past. Such motivations are difficult to observe without the benefit of experimental controls. We find a sizeable fraction of our participants in favor of the public trust and a pattern of choices that correlate with individual and group cooperation levels during the unregulated history. This pattern allows us to infer that agents have social preferences that include considerations for income distribution and reciprocity. Our findings also suggest that subjects cannot fully express these preferences during the unregulated game, leading to a residual demand for redistribution and reciprocity as offered by the trust fund solution.

We investigate the social preferences of individuals who face a regulatory change after a common interactive history of negative externalities. We model an egalitarian solution to mirror a trust fund approach to distributing emission permits and an unequal distribution to mirror a grandfathering approach. Our design reflects recent policy debates over regulatory change in social dilemma situations, where distributional issues are often a central issue in lobbying around such policies. In particular, we focus on recent policy proposals that explicitly include provisions for redistributing scarcity rents that result from the initial allocation of tradable pollution licenses. To reflect this context, we design a controlled laboratory experiment in which participants first play an interactive negative externality game and then make income distribution decisions in a separate non-interactive policy making task. We find that a sizeable portion of our participants express preferences in favor of the egalitarian policy solution. We conclude that agents have social preferences that include considerations for income distribution and reciprocity other than for self-serving reasons. The preferences expressed intensify with the cooperativeness of the individual as expressed during the unregulated stage. This is particularly the case in groups that were not successful at cooperating and is consistent with reciprocity concerns. Increased inequality of the grandfathering solution also results in an increase (although perhaps less significantly) in demand for the trust.15 Finally, we observe some preferences in favor of the trust fund even amongst individuals who were quite un-cooperative in the past, and these intensify in the groups that were more successful at cooperating. This is consistent with our hypothesis on distributional preferences. Our findings broadly support inferences about social preferences drawn elsewhere in the experimental literature. Our experiment differs significantly from others that elicit distributional preferences because the initial income positions from which redistribution choices are made are endogenously determined through a common history of interactions rather than exogenously imposed by the experimenter. Further, we elicit social preferences in the absence of influences from self-serving interests, efficiency concerns, and strategic uncertainty. These influences cannot be controlled in purely interactive settings or in less controlled settings in the field. Our design is motivated by our interest in evaluating the possibility that regulatory changes that include distributional concerns, other than those based on competing self-serving interests, have some support in existing social preference structures. We find that this is the case in our laboratory environment. These findings stand in marked contrast to those reported in Rutström and Williams (2000) who also ask whether past actions have an effect on distributional choices. Nevertheless, they employed a context where subjects did not have a common and interdependent history. Their subjects went through a stage one task individually and then made distributional choices in a stage two. Stage two efficiency, as captured by the aggregate group earnings, depended on the combination of independent actions taken in stage one by all group members. Despite the link to history that was provided through the efficiency effect, they found choices to be consistent with a pure self-regard. These contrasting results indicate that distributional and reciprocal preferences may depend on perceptions of a common past where the nature of players as cooperative or not is revealed in a transparent way. Our findings provide a step toward a better understanding of the preferences underlying the economic and political process of policy design and open the way for future research to address other issues. Such issues include the trade off between self-interest and distributional preferences for the political actors, the differences in the characteristics of interested parties such as economic size, and issues of political influence. The experimental design introduced here, where the initial income positions are endogenously generated, provides a promising framework for continued research on the preferences underlying the political process of regulatory change.