IN THE semi-arid lowlands of Mufindi, in southern Tanzania, water is hard to come by. Villagers rely on irrigation to grow maize, potatoes and spinach. Informal and often woolly codes govern how much water each farmer diverts to their own fields, and how much they leave for their neighbours downstream. Some farmers, naturally, turn out to be more grasping than others. Economists typically see such decisions as irreducible: there is no accounting for individuals’ values and preferences. But a new study* investigates why there is such variation in generosity among Mufindi’s farmers.
The researchers asked other villagers to rank each farmer’s social status on a scale of one to four. Then they invited the farmers to take part in a game in which participants had to decide how much water they would take under different scenarios. Participants were paid small sums, which varied according to how well they did in the game. They received more money if they reaped a bigger harvest by taking more than their share of water, for instance, but less if the other villagers fined them for violating water-sharing norms....
from The Economist: Finance and economics http://ift.tt/1MQlMz1
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