Combining Institutional Frameworks and Agent-based Simulation for the Design of Enforcement Policies

TL;DR: In this paper, an institutional approach to the study of self-organization and self-governance in CPR situations is presented, along with a framework for analysis of selforganizing and selfgoverning CPRs.

TL;DR: Agent theory is concerned with the question of what an agent is, and the use of mathematical formalisms for representing and reasoning about the properties of agents as discussed by the authors ; agent architectures can be thought of as software engineering models of agents; and agent languages are software systems for programming and experimenting with agents.

Abstract: In 1985, the National Academy of Sciences sponsored a conference in Annapolis, Maryland, to discuss common property resource management. This conference was a watershed in the development of the theoretical underpinning of institutional design for successful common pool resource (CPR) management. Since then, an international network of over 2,000 researchers has developed, and the International Association for the Study of Common Property (IASCP), formed in 1989, has held two successful international conferences. Dominating the intellectual evolution of the field has been the work of Elinor Ostrom, co-director of the Workshop in Political Theory and Policy Analysis at Indiana University. Her book, Governing the Commons, presents a lucid exposition of the current state of institutional analysis of common property problems. Part of the Cam-bridge series on Political Economy of Institutions and Decisions, the book addresses how common pool resources may be managed successfully without falling prey to the "tragedy of the commons." Common pool resources are characterized by subtractability (i.e., withdrawal by one user reduces the amount of the resource left for other users) and joint use by a group of appropriators. Thus, a common village grazing field has forage for a limited number of beasts, and all the villagers are entitled to pasture their animals on the field. Community rules of access and management are required to sustain the field from season to season. Problems in managing CPRs arise when the rational individual determines that he will still have access to the resource even if he does not fully contribute to its maintenance (the "free rider" problem). An extensive literature discusses the effect of free riders, concluding that common pool resources will inevitably fall into ruin. One of two solutions is usually offered to avoid this problem: centralized governmental regulation or privatization. Noting the numerous occasions in which common pool resources are managed successfully with neither centralized governmental control nor privatization, Ostrom argues for a third approach to resolving the problem of the commons: the design of durable cooperative institutions that are organized and governed by the resource users. In Governing the Commons she examines small-scale common-pool resources. Resource user groups examined range in size from 50-15,000 people who rely substantially on the common pool resource for their economic well-being. She has further

TL;DR: Agent-based modeling is a powerful simulation modeling technique that has seen a number of applications in the last few years, including applications to real-world business problems, and its four areas of application are discussed by using real- world applications.