On the sustainability of common property resources

We provide a model where a common property resource is managed by two types of agents, cooperators and noncooperators, who adjust their extraction strategies in response to persistent differential payoffs. In our model, the social approval of cooperators works as a reward mechanism which, as we show, favors both the pervasiveness of cooperative behavior and the sustainable management of natural resources. Specifically, we show that in the presence of such a reward mechanism a stable equilibrium can be reached with both strategies being practiced simultaneously and a decentralized and sustainable management of common property resources is possible. (c) 2007 Elsevier Inc. All rights reserved.