Effectiveness of the approval mechanism in a three-player common pool resource dilemma

Abstract

Selfish players in common pool resources games (CPR) prevent to reach socially efficient outcomes. To solve this CPR dilemma, we investigate further the approval mechanism (AM) in a three-player CPR game. Adding a third player is useful to test the efficiency of approval rules, i.e. majority versus unanimity, in the second stage of the AM. We find that the AM mitigates over-exploitation in three player CPR games, and that unanimity performs better than majority. Nevertheless, with three players, the mechanism surprisingly works better in case of approval failure rather than approval success. However, most approvals are predicted.