An Examination of the Stability of Cooperation in an Ongoing Collective Action: The Case of Nonpoint Source Pollution in Lake Pittsfield

Abstract

This results suggest that without additional incentives, farmers are likely to abandon their voluntary agreement and resume their use of atrazine within the watershed. It is then demonstrated how a combination of policy instruments can be used to alter the underlying game configuration of the collective action problem, resulting in cooperative outcomes. An ambient-based penalty, when used in conjunction with a subsidy payment, is shown to produce divergent incentive structures that shift the classification of the collective action away from a coordination problem with two equilibria to a mixed configuration containing several different game structures and many possible equilibria. The analysis concludes with an example confirming that joint cooperation is not a prerequisite to the realization of a socially desirable outcome.