How High School Students Proved A Nobel Prize Economist Right on the Environment

February 23, 2014

What happens when you give high school students goldfish crackers and tell them to act like commercial fishermen? Interestingly, they prove the validity of a couple tenets of environmental economics.

David Boze asked me to teach a section of his economics class, focusing on environmental problems. I decided to teach about the "Tragedy of the Commons." The term, created by Garret Hardin, describes a situation where there are no property rights, leading people to overexploit resources, like fish in the ocean, because a fish left behind will simply be caught by the next fisherman. Rather than managing for a future you can't be certain of, everyone grabs what they can today because it may not be there tomorrow.

I broke the class into three groups of ten and put 30 goldfish crackers in front of each group. I gave them just over a minute to "fish," grabbing the fish they wanted. I told them that any fish left after the first round would mulitply and double for the second round.

I also told them that whoever had the most fish at the end of each round would receive an iTunes gift card.

At the end of the first round, there were two results:

  • In one group, everyone took one fish. Then one guy grabbed a second one toward the end. Another boy quickly grabbed two more as time ran out and won the gift certificate.
  • In the other two groups, everyone grabbed only one fish.

This, I will admit, was not what I expected. It was better than what I expected.

(I didn't do the second round because the game only works when there is the expectation of another round and I told them there wouldn't be a third round.)

The group with the boys who grabbed the extra fish demonstrated the validity of the Tragedy of the Commons -- if you can grab as much as you want, you will take what you need to win the game. Had I let the game go longer, there would likely have been more grabbing of fish.

The other two groups, however, proved the insight of Elinor Ostrom, the first woman to win the Nobel Prize in Economics.

Ostrom argued that faced with a Tragedy of the Commons, groups can often find cooperative solutions that prevent overutilization of the resource. That's exactly what happened with the students standing around the other two tables.

When I started the clock, the students at each of the tables began negotiating. They agreed to take only one fish each so there would be more fish in the second round. They came up with a sustainable solution.

Enforcement was easy since they were all staring at each other. Since they had perfect information about what everyone else was doing, the incentive to cheat was reduced. Obviously it wasn't reduced to zero since one group did have cheaters, but in the other two there was no cheating.

In her book "Governing the Commons," Ostrom gave numerous examples of cooperative solutions that emerged from negotiations, where the members agreed on effective enforcement mechanisms -- just like the students I worked with.

It was exciting to see such a spontaneous example of her argument come to life.

The next time I have the opportunity to teach the lesson I may change it up. Perhaps I'll have everyone write the number of fish they catch secretly to introduce enforcement difficulties. I might introduce some form of property rights arrangement.

I only hope I learn something as useful as I did this time.