The Tragedy of the Commons

In an unregulated market, individuals do not pay for their use of public goods and as a result, those goods tend to be depleted in ways that fail to maximize long-term efficient allocation of resources.  This sort of market failure is known as the problem of public goods, or, in Garrett Hardin’s classic treatment of the problem, the tragedy of the commons.

Hardin introduces the notion of the tragedy of the commons with a tale about the fate of herdsmen who share a pasture in common.  Each herdsman notes that if he runs one more animal on the commonly held pasture, he will get the full benefit of that animal’s value when he takes it to market, but since the pasture is held in common, he will bear only a fraction of the cost of raising the animal.  As a result, each herdsman runs an additional animal on the pasture, and then another and another until the finite commonly held pasture is depleted to the point where it of no use to anyone.  A similar tragedy of the commons is inevitable whenever self-interested individuals have free and unlimited use of a finite commonly held resource.  Similar stories can be told about fisheries, air pollution and climate change among any number of further cases.  The only way to avoid a tragedy of the commons is to prevent one or another of the conditions that give rise to one. Perhaps we cannot expect individuals to consistently refrain from acting on their own interests.  But there remain the possibilities of limiting access to commons, expanding the commons infinitely, or not having a commons at all.