Economic games prove too much for rats in Laos

Using a basic game that only requires pen and paper, Australian researchers have shown that economic-theory-based games can have a real-world impact on the livelihoods of farmers in Laos who are faced with a rodent devastation.

Researchers from Monash Business School partnered with researchers from the National University of Laos to devise and deliver the economic game in 18 villages in the Luang Prabang province of northern Laos that were badly impacted by food shortages due to a rat infestation eating crops.

The rat problem has affected much of northern Laos since 2008, with the rodents eating at times up to 20% of cash crops such as rice and maize. This has led to strained household finances and food insecurity in one of the poorest nations in the region.

Researcher Dr Paulo Santos, a senior lecturer in the Department of Economics at Monash University, says the research came about after a call out from the Australian Centre for International Agricultural Research (ACIAR), an agency that falls under the Department of Foreign Affairs and Trade’s aid program.

“When we started this project we knew that despite reductions in poverty, food security was not [improving] in this part of northern Laos, and after several studies we found rodents was one of the main issues driving food insecurity,” says Santos.

“What we found was that there are known parallels between these type of problems and what is known in economics as either coordination gains or common property resource gains.”

Common property resource gains theory dictates the need for common action and mutual cooperation of shared common property resources to avoid their over-use or overexploitation.

The theory states that when there is a common resource, outcomes are interrelated to what others do. Because there is an interdependency, any individual maximising behaviour that doesn’t take that interdependency into account will leave everyone worse off.

Using the economic theory, Santos and the other researchers devised a simple game that could be played with only pen and paper and encouraged cooperation between the farmers taking part.

“The game was designed to inspire collective action and framed as a pest management activity, the effectiveness of which depended on the decision of others,” Santos says. “If one farmer was killing rats and the others weren’t, the rats would just continue to populate neighbouring farms. We knew we could get better results if they worked together.

“The farmers were asked to document how much time they were putting into rodent control versus how much time they allocated to producing their crops in the game. When they found a sweet spot that maximised their collective effort they were given a financial incentive in the game.”

Through playing the game, the players learnt that if they sacrificed some of their immediate gains, for instance crop harvest work, and instead put that time into rodent control, by the end of the game they and all the other players would see an increased payout.

About 75 people in each village would sit down with the researchers and play the game, a number that at times represented a significant proportion of the population in small villages. The researchers returned a year later and surveyed both the villages that had played the game and others that had not.

The results, which were published in the Proceedings of the National Academy of Sciences (PNAS), found that the game added around 80 kilograms of rice per year per household in the villages where the game was played, an increase of about 20%.

“So our argument is that this is kind of a low-cost solution in terms of overcoming the coordination problem,” says Santos. “Because people understand that others are willing to put time and effort into [the] production of these kinds of public goods, it becomes more likely that [the public good] is produced.

“In the game themselves people started cooperating. So they learnt that others were, in fact, more willing to cooperate.”

Santos says that this cooperation in the game meant that when the time came to bring the same spirit of cooperation to the field, villagers also did more because they expected others to be showing up.

“If a much larger fraction of people put a share of their time and their effort into reducing the infestation by rodents, then it is much more effective,” he adds.

Santos says that he hoped that the success of this economic game would encourage others to think about how economic games could be used in other scenarios to increase collectivised action to address common issues.

“We cannot say that [in] other situations it will be equally effective in terms of behaviour change,” he says. “But I honestly think that it’s worth a try, because the costs of running these types of games in the field are relatively low, [and] if they are successful, the returns per dollar [of cost] are high, in our case almost $12.”

Santos suggests that the over-exploitation of aquifers and forests were two other areas in which these kinds of economic games may have an impact. “This work is important because the game can be applied to any other region or issues where cooperation is needed, for example water management, forest management, waste or garbage collection,” he says.