Ownership Effect in the Wild: Influence of Land Ownership on Ownership on Agribusiness Goals and Decisions in the Argentine Pampas

Published in Journal of Behavioral and Experimental Economics Volume 58, October 2015, Pages 162-170
Authors

Arora, P., Bert, F.E., Podestá, G.P. and Krantz, D.

 
Publication year 2015
DOI https://doi.org/10.1016/j.socec.2015.02.007
Affiliations
  • Manhattan College, Management and Marketing, 4513 Manhattan College Parkway, Riverdale, NY 10471, USA
  • University of Buenos Aires, Viamonte 430 Street, Buenos Aires City, Argentina
  • University of Miami, 4600 Rickenbacker Causeway, Miami, FL 33149-1096, USA
  • Columbia University, Department of Psychology, 1190 Amsterdam Avenue, New York, NY 10027, USA

 
IAI Program

CRN3
IAI Project CRN3035
Keywords
Ownership effect
Goals
Land use decisions
Decisionmaking
Environmental attitudes
Social dilemma
Argentina

Highlights

•Land ownership exerts psychological influence on agribusiness goals and decisions.

•Field survey and interviews with agribusinesses in the Argentine Pampas.

•The same decision-maker has contrasting goals for owned and rented land.

•Value of owned land is maintained but rented land is exploited for current profit.

•Tenants play a two-person commons dilemma game with their future selves.

Abstract

The psychological influence of ownership, albeit well studied in the lab, is less understood in the field. We examine its influence on agribusiness goals and decisions in the Argentine Pampas. Study 1, a survey of agribusinesses, finds differences in goal focus based on land ownership: Ownership positively predicts a focus on longer-term economic and social goals, as well as pro-environmental attitudes. Land ownership negatively predicts short-term profitability goal focus, which in turn mediates the use of futures/options to maximize profit, and influences land use for cash crops. Study 2 unpacks within-business differences via interviews with agribusiness that farm both owned and rented land. Ownership-based differences are observed in underlying intentions: the same individual focuses on enhancing the value of owned land, but on maximizing returns from rented land. This focus on deriving immediate value may be motivated by the initial rental cost incurred by the tenant, which can be thought of as a loss, making immediate profitability a more salient goal. This short-term focus, though logical in light of prevailing one-year leases in the Pampas, ignores that over 85% of leases are renewed by the same agribusiness, suggesting that the same tenant may well be the person facing future consequences. We explore the possibility that tenants may be effectively caught in a two-person social dilemma with their future selves.