Simple Incentives and Group Dependence for Successful Payments for Ecosystem Services Programs: Evidence from an Experimental Game In Rural Lao PDR

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In this paper, we use a new game-based tool to evaluate the immediate and longer-term behavioral change potential of three different payment for environmental services (PES) delivery mechanisms: direct payments for individual performance, direct payments for group performance and insurance. Results from four rural shifting-cultivation dependent communities in Lao PDR suggest that easily understood group-oriented incentives yield the greatest immediate resource-use reduction and experience less free-riding. Group-based incentives may succeed because they motivate participants to communicate about strategies and coordinate their actions and are perceived as fair. No incentive had a lasting effect after it ceased, but neither did any crowd out the participants' baseline behavior. Temporary reductions in resource dependence may provide a buffer for development of new livelihoods and longer-term change. Games like the one developed here can help policymakers appropriately target environmental incentive programs to local contexts and teach program participants how incentive schemes work.

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