Measuring externalities in an information commons: the case of libraries

The present paper measures external effects in a specific type of common-pool resource, an information commons. Employing a novel dataset related to more than 700,000 transactions in distinct libraries during a 10-year period (2006-2015), we estimate the external effects of actions of library users who were subject to a non-monetary sanction (professors and university employees) on users who were subject to a monetary sanction (students). Additionally, we estimate peer effects among users, considering the number of items they borrow from the library. When investigating externalities, we uncover a “crowding-out” effect: for an additional unity in professors and employees' counts, there is an approximate one-to-one decrease in students' counts. In the case of peer effects, we find a positive influence of group behavior on individuals: for every 100 books borrowed by a user's peer group, there is a rise of three books per user, on average. The results reported in this paper have important implications for theories based on common-pool resource management, as well as public goods provision.