Elinor (Lin) Ostrom, Arthur F. Bentley Professor of Political Science was awarded the 2009 Nobel Prize in Economic Sciences “for her analysis of economic governance, especially the commons". She is awarded for her work on the tragedy of the commons. Commons are resources to which no one holds title, and come in three sizes: local (a grazing commons, a forest), medium (a species valuable for hunting or fishing, an underground aquifer), and global (the oceans, the atmosphere). Commons are routinely overexploited, leading to low efficiency of exploitation and even destruction. Ostrom’s breakthrough was to discover cases where commons were not over- exploited and not destroyed, sometimes over centuries. These cases led her in her influential book Governing the Commons (1990) to enunciate a series of design principles to govern a commons successfully. By now she has amassed a data set of over 5000 cases of commons, both successes and failures. In addition to this empirical effort, Ostrom recruited economists James A. Walker and Roy Gardner from Indiana University’s Department of Economics to broaden the scope of the analysis, to include game theory and controlled laboratory experiments. The lens of game theory provides predictions for behavior in a commons under a variety of rules, and laboratory experiments show what human subjects do when playing for considerable sums of money in a laboratory commons. These extensions further support her design principles. The Nobel Committee’s press release explicitly recognizes Professor Ostrom’s collaboration with Professors Roy Gardner and James Walker.
Professor Gardner, who has worked with Elinor Ostrom for the last quarter century and who has worked with 4 Nobel Prize winners: Reinhard Selten, Robert Engle, Robert Aumann, and Elinor Ostrom comments that Lin has all the hallmarks of a Nobel Prize winner---intelligence, work ethic, and persistence. He states: ”I have never known anyone to work harder than she does. She is informal (“Call me Lin”) but rigorous, with an attention to detail second to none. As I told her in person just before she won the Prize, “You are the best co-author anyone ever had.”
The productive relationship between professor Ostrom and the economics faculty is ongoing:
This past summer, now Nobel Prize winner Elinor Ostrom and Economics Department faculty member Jimmy Walker received word of funding for a, 3 year, National Science Foundation grant. Collaborative with James Cox and Vjollca Sadiraj, at Georiga State University, this research examines behavioral differences across public good and common pool resource settings that are linked to asymmetries in norms of behavior, as opposed to differences in payoff consequences of strategies. The proposed research includes an examination of sequential move games in which second movers with asymmetric power make their decisions after first movers. The opportunities for these “bosses and kings” to exploit cooperative choices of first movers is systematically varied across design settings. The central questions are whether the powers associated with these bosses and kings lead to exploitation, and to what extent this power has significant effects on the willingness of first movers to behave cooperatively. Importantly, the research will examine whether these effects differ across the paired public good and common pool settings.
This grant builds on the collaboration of Ostrom and Walker that goes back over 20 years. Ostrom’s contribution to study of the “commons” received international recognition on the publication of her seminal book, Governing the Commons, 1990. Through a masterful analysis and synthesis of conceptual issues and behavior from the field, this volume laid the foundation for a framework that defined the scope and methods by which generations of scholars began to reconsider the governance of the commons from both a pure research and policy analysis approach. Today, it remains the most influential book ever written on the topic, and the foundation for the movement she fostered that eventually led to her Nobel Prize.
Parallel to the field work in this area, in 1986, Ostrom and Walker, with their colleague Roy Gardner, began a research project to examine behavior in common-pool resources settings created in the experimental laboratory, using game theory as a foundational tool. Interestingly, their initial experimental design began with a decision making setting linked closely to that described in the seminal work by Scott Gordon, Journal of Political Economy, 1954, Professor Emeritus of the Department of Economics at Indiana University. To support this line of inquiry, Gardner, Ostrom, Walker received their first NSF grant in 1987, another in 1990, and another in 1994. Now, years later, they remain close associates at the Workshop in Political Theory and Policy Analysis, where Walker is a co-director with Michael McGinnis from the IU Department of Political Science.