Tragedy of the commons

The ‘Tragedy of the Commons’ refers to a situation where a shared resource is overused by the people using it, even though they know that if they all overuse it then it will run out.

Take an example of overfishing. Every fisherman knows that if there is too much fishing then eventually fish stocks will run out. If all the fishermen could agree to fish at sustainable levels then the fish stocks could last forever. However, if one fisherman starts to overfish then eventually the fish stocks will run out.

When this happens the others might as well overfish as well to get as much as possible before the stocks run out. It only takes someone to start overfishing to mean that it is then logical for everyone else to overfish. The first person might start because they think that just them overfishing will not make any difference but once they start then everyone else soon joins them and the stocks run out.

This is similar to the prisoners’ dilemma. However in the prisoners’ dilemma individuals cannot communicate and so, if they act logically, then they won’t co-operate with the other players and will end up with a worse outcome. In the tragedy of the commons everyone can communicate but it still leads to a situation where a collective resource is overused.

Some ways to try to manage a situation like this are:

– Privatize the resource so that it is owned by one person, who then has an incentive to sustain it.

– Use licenses or permits to manage the use of the resource, but of course these need to be policed.

– Use legislation to limit use of a resource

Today’s takeaway: If you are managing a shared resource then you need to have controls in place to stop anyone exploiting it.


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