Coping With Unreliable Water Supply: An Experimental Study of Exit and Voice

Abstract

AbstractUnreliable public water supplies cause human hardships and are still common worldwide. Households often deal with the issue by adopting various coping strategies that are representative of economic decentralization (e.g., using private wells, sourcing from third‐party vendors) and political decentralization (e.g., making petitions to a public provider). There is growing interest in these user‐level decentralized coping strategies, but their relative effects on provider's behavior and the long‐term sustainability of public water supply remain unclear. This puzzle has not been tackled using an experimental approach. This study reports a controlled behavioral experiment conducted to test the relative effectiveness of different coping strategies on infrastructure quality and users‐provider cooperation in the context of agricultural water supply. We tested experimental treatments involving two classes of coping strategies: exit and voice. The exit option represents users' shift to an alternative water source. The voice option represents users' direct effort to influence a public irrigation service provider. We recruited 272 human subjects into our 4‐player experiment (one provider and three users) and observed and compared their decisions under four treatments (exit, voice, their combination, and no options). The results show that the voice option leads to improved outcomes compared to other choices that include the exit option, suggesting that contrary to previously thought, the exit option can be detrimental to users‐provider cooperation. We also observed that a user tends to cooperate more (pay and use the public service) when other users do the same.