Conference Agenda

We study how decision-makers that exploit coupled human–natural systems respond to shocks and how attribution of shocks to human or natural causes affects decisions. The small-scale fisheries at Lake Victoria are a prototypical case: the livelihoods of fishers depend on ecological dynamics that they themselves shape through their harvesting choices. In a lab-in-the-field experiment, fishers are randomly exposed to a payoff shock that differs only in its causal origin (human, natural, or joint) while holding material incentives and probabilities constant.

We identify two main patterns. First, experiencing the shock reduces exploitation in a subsequent, identical situation. Second, this behavioral response tends to be stronger for human caused shocks than for natural shocks and is demonstrably weakest when jointly caused by human and natural factors. We further examine whether these effects are explained by individuals’ locus of control. Locus of control predicts baseline system exploitation, but does not explain behavioral adjustment or moderate attribution effects. Our findings provide experimental evidence that causal attribution can shape responses to shocks in coupled human–natural systems.

Inspired by fertilizer use, we investigate behavior in settings where externalities arise from individual activities crossing an uncertain individual threshold. We show within an analytic model that only threshold uncertainty causes individual and social interests to diverge with individuals accepting a larger probability of crossing the threshold than is socially optimal. We then theoretically investigate the impact of information on thresholds as well as taxing the caused externalities for fertilizer use. We test our predictions within an experiment with farmers as well as with students. We find that, even without any regulation in place, farmers invest significantly less than their payoff maximizing level, but on average close to the social optimum. The probability of exceeding the individual threshold and the resulting damages significantly decrease when subjects are provided free informative signals or have to pay for caused damages. In contrast, taxing inputs (fertilizer use) does not decrease the risk of causing external effects.

The increase in waste generation has posed significant challenges to waste management systems worldwide. Effective waste management can be achieved through efficient source sorting. Based on the mandatory waste management policy of China, we design and experimentally test three policy-related informational nudges, focusing on public health, potential penalties, and sorting achievement, to encourage waste sorting behaviors among urban residents. Additionally, we record household daily water and energy consumption to assess behavioral spillover effects. We find that nudges have a significant impact on improving residents’ waste sorting behaviors. However, results are inconclusive regarding spillover effects. Overall, our findings underline the importance of nudging in directly improving environmentally sensitive behaviors but raise doubts about spillover effects. For policymakers, signaling the effectiveness of sorting is suggested, as the efficacy nudge provides a cost-effective intervention.

In the face of climate change induced droughts, flooding, and erratic rainfall, policymakers in low-income countries increasingly focus on integrated watershed management as a climate-smart strategy. This, however, requires collective action by smallholder farmers. In this study, we examined the effect of ex-ante mutual insurance network on collective action and farmers’ investment in watershed management under erratic drought scenarios. We conducted a lab-in-the-field experiment with 490 randomly selected smallholder farmers in Ethiopia using a dynamic irrigation game. Farmers were assigned to one of four experimental arms: (i) drought risk, (ii) mutual insurance, (iii) mutual insurance + drought risk, and (iv) base treatment. The results show that drought risk alone, as well as when combined with mutual insurance, negatively affects farmers’ investment and water extraction. Mutual insurance alone has no effect on investment. Heterogeneity analysis reveals that the effect of mutual insurance on investment in watershed management depends on farmers' positions (upstream or downstream) and the degree of social preferences (reciprocity). Furthermore, while drought decreases investment under no or moderate drought risks, it increases investment when it is severe or extreme. Given the expected increase in extreme weather events, these results reveal insights into strategies to enhance farmers’ collective action for integrated watershed management as a pathway to climate change adaptation.