Issue that occurs with public goods that are non-rivalrous and non-excludable.

Each individual pursuing their self-interest contributes to the depletion of the public good for the eventual harm of the whole group.

Each individual seeks to be better off in the short-term, at the expense of the whole group (including himself) in the long term.

(from Book - Thinking in Systems - Donella Meadows)

The tragedy of the commons arises from missing (or too long delayed) feedback from the resource to the growth of the users of that resource. The more users there are, the more resource is used. The more resource is used, the less there is per user. As the fish get more scarce they become more expensive, and it becomes all the more profitable to go out and catch the last few. That’s a perverse feedback, a reinforcing loop that leads to collapse. It is not price information but population information that is needed.

Things may get worse as people increase their efforts to deplete the resource as quickly as possible to get more themselves and prevent others from taking it. This becomes similar to the idea of Arms race as it creates a Reinforcing Feedback Loops.

More broadly, this system dynamic is defined as a coordination failures - multipolar traps (Moloch)

Dealing with it

  • Ostrom’s Framework to Managing Commons
  • From Book - Thinking in Systems - Donella Meadows

    3 Options to Deal with it

    1. Educate and exhort. Help people to see the consequences of unrestrained use of the commons. Appeal to their morality. Persuade them to be temperate. Threaten transgressors with social disapproval or eternal hellfire.
    2. Privatize the commons. Divide it up, so that each person reaps the consequences of his or her own actions. If some people lack the self-control to stay below the carrying capacity of their own private resource, those people will harm only themselves and not others.
    3. Regulate the commons. Garrett Hardin calls this option, bluntly, “mutual coercion, mutually agreed upon.” Regulation can take many forms, from outright bans on certain behaviors to quotas, permits, taxes, incentives. To be effective, regulation must be enforced by policing and penalties

Created on: 2020-12-21 Related: economics | biosphere stewardship | market failure