Session 12. 6. B.

Resource governance problems are characterized by social dilemmas and complexity of the resource dynamics. Most experimental research on resource management focuses on the social dilemmas participants need to overcome to achieve cooperative outcomes. However, various studies suggest that the understanding of the dynamics of the system may play a role in the performance of groups. There is also evidence that people are more risk averse if uncertainty is caused by decisions of other people instead of uncertainty of nature.
In order to understand the role of resource complexity in more detail, we study the decision-making in a one-person dynamic resource game, varying different types of components of the resource complexity and removing the social dilemma component. Earlier work with single-person decision-making has focused on the understanding of systems dynamics, and the role of information. In this presentation we will present the results of a pre-registered experiment were we focus on additional aspects of resource complexity, that have been explored only in the context of social dilemmas: external shocks, risk of ending round, threshold impacting resource dynamics, and state of the resource. We also test the impact of uncertainty as risk, i.e. known probabilities of certain outcomes, and ambiguity, i.e. unknown probabilities of the outcomes.

The increasing frequency and intensity of extreme weather events are challenging the ability of communities and individuals to recover from such adverse events. Insurance is one way to protect against the financial losses associated with natural hazards. However, insurance policies are becoming less accessible in high-risk areas, impacting households’ ability to cope with natural hazards. These changes in the risk and insurance landscape raise questions about how to manage risk, who should bear the cost of increasing climate-related damages and what are perceptions of fairness when it comes to sharing the costs of risk exposure. We investigate fairness ideals in the contest of insurance choices through an experiment where participants decide whether to subsidize risk in insurance plans. We test whether unequal access to risk reduction investments influences willingness to share the cost of risk. Findings are based on an online behavioral experiment conducted with a U.S. representative sample.