Does the paradox of plenty exist? Experimental evidence on the curse of resource abundance

Andreas Leibbrandt, John Lynham

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)

Abstract

There is conflicting evidence about whether abundant resources are indeed a blessing or a curse. We make use of specially designed economic experiments to investigate how resource abundance affects cooperation in the absence or presence of regulatory institutions. We observe that in the absence of regulatory institutions, there is less cooperation in groups with access to large resource pools than in groups with access to small resource pools. However, if regulatory institutions are present, we show that there is more cooperation in groups with access to large resource pools than in groups with access to small resource pools. Our findings also reveal that resource users are more willing to regulate access to abundant than to small resource pools. These findings provide causal evidence for the “paradox of plenty” and identify the causes for the pitfalls and potentials of resource wealth.

Original languageEnglish
Pages (from-to)337-354
Number of pages18
JournalExperimental Economics
Volume21
Issue number2
DOIs
Publication statusPublished - Jun 2018

Keywords

  • Institutions
  • Lab experiment
  • Rent seeking
  • Stakes

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