The Embeddedness of Governing the Commons: A Game Theoretic Perspective on Cooperation, Coordination and Trust in Water Sharing Interactions

This dissertation, "The Embeddedness of Governing the Commons: a Game Theoretic Perspective on Cooperation, Coordination and Trust in Water Sharing Interactions" by Yu, Wang, 王雨, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: The governance of the commons is an elusive task. For one thing, the overexploitation of natural resources and the deterioration of environment have posed severe threats to human society. For another, most of the threats result from social dilemmas such as problems of cooperation, coordination and trust. These collective action problems all entail a paradox in which rational individual behavior leads to irrational collective outcomes. In previous literature, answers for coping with "the tragedy of the commons" range from the imposition of government to the establishment of market and endogenous rules. However, this institutional perspective has overlooked the social and ecological characteristics embedded in common-pool resources(CPR) systems. Furthermore, few studies have taken a formal game theoretic approach to examine how embeddedness might affect collective action problems in complex social-ecological systems. This thesis uses formal game theoretic models to investigate the dynamics of collective action problems in water sharing interactions. Three types of innovative game theoretic models are developed; namely, the asymmetric N-person Prisoner's Dilemma game, the asymmetric N-person Stag-hunt game and the two-level Trust game. Various elements of social and ecological embeddedness, including but not limited to direct and indirect reciprocity, heterogeneous utilities, varied utility functions for public good production and multi-level interactions, are incorporated into models to examine conditions under which collective action problems are more likely to be alleviated. Moreover, this study associates implications of the formal models with practice of water governance in contemporary China and provides insights into the strengths and weaknesses of several empirical cases including decision-making processes, water allocation schemes, payments for ecosystem services programs and multi-level governance. Major findings of this study are: 1) Collective cooperation between different upstream and downstream actors is subject to joint effects of reciprocity and asymmetric payoff mechanisms. Downstream actors require a strong prospect of long-term interactions whereas upstream actors are more sensitive to the level asymmetries. 2) The problem of coordination can be addressed through settings of asymmetric cost-benefit ratios and varied total utility functions. Actors' heterogeneous contribution to public good may alter the number of cooperators and the production of public good. 3) The imposition of an overarching authority can be a "double-edged sword" in terms of its impacts on trust construction. A trustworthy authority may relax conditions for placing and honoring trust. The conditions become more restrictive when the authority is untrustworthy. 4) Information transparency and availability, "the shadow of the future," regional heterogeneities, institutional fit and trustworthiness of overarching authorities are critical factors that affect the performance of water governance in China. This study contributes to the existing literature in three main aspects. Firstly, it introduces the effects of embeddedness into CPR studies which conventionally focus on the institutional aspect of CPR governance. Secondly, it brings the perspective of collective action into water resources management studies which traditionally