The Comparison of Four Types of Everyday Interdependencies: Externalities in Exchange Networks

Actor behavior is compared theoretically and experimentally in four well-known everyday interdependence situations; (i) the market, (ii) the tragedy of the commons or resource dilemma, (iii) the public good problem, and (iv) the household. It is shown that the four situations can be studied within one general framework of exchange networks with externalities. Core theory is generalized to exchange networks with externalities and applied to derive predictions concerning differences in behavior in the four situations. The experiments corroborate the prediction that competition is most fierce in the resource dilemma, fierce in the market, and absent in the public good problem and household.