Managing local environmental resources with moderately enforced government regulations can often be counterproductive, whereas nonbinding communications can be remarkably effective. The authors describe a classroom experiment that illustrates these points. The experiment is rich in its institutional settings and highlights the challenges that policymakers and communities face in enforcing environmental regulations. The experiment has been run successfully in a varieTY of courses and disciplines at both the undergraduate and graduate levels, including microeconomics, public finance, and a natural resources conservation course. The experiment would be appropriate in environmental economics and game theory courses. This experiment has also been used in the field with villagers who face challenges similar to the experiment; the field results were comparable to those in the classroom.
