Tragedy of the Commons

The “tragedy of the commons” describes a social dilemma in which rational human behavior in using a resource as an unmanaged commons leads to overuse and, consequentially, to the destruction of that resource. It has proven a useful concept for understanding how resources are ruined not by some outside forces but by the inherent behavior that can be expected whenever a number of individuals own a scarce resource in common. A famous article in the journal Science by Garrett Hardin (1968) introduced the concept to common parlance.

Central to the tragedy of the commons is a metaphor: Imagine a common parcel of land (the commons) used by farmers. As a rational being, each herder will try to keep as many [Page 398]cows as possible on the land, even if the consequence of this behavior would be the destruction of the commons. Each farmer tries to maximize his gain. The utility of adding one more animal on the land has one negative and one positive effect:

• Positive effect: The farmer receives all the benefits from each additional animal.
• Negative effect: The land is slightly damaged by each additional animal.

The concept of the tragedy of the commons can be applied to the problem of overuse in national parks like Yosemite, where large numbers of visitors like these can threaten the survival of the resource.

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Because of the unequal division of the costs and benefits, each rationally behaving farmer concludes that the highest utility to him is to add another animal on the commons. And another, and another, and so on. He gains all the benefits, but the disadvantages are shared among all farmers using the commons. The benefits are privatized, and the costs are socialized. This is no big problem as long as the carrying capacity of the commons is not exceeded. As soon as the number of farmers surmounts a certain threshold, however, the tragedy of the commons takes effect: The carrying capacity is exceeded, but each farmer still seeks to pursue his short-term interest. Because all farmers reach the same conclusion, the long-term consequence is that everyone loses their share in the collective resource.

The tragedy herein lies in the paradox that individually rational strategies lead to collectively irrational outcomes. The rational behavior of each individual leads—in a finite world—inevitably to the ruin of the commons. In a nutshell, the central cause of any tragedy of the commons is that individuals do not have to bear the entire costs of their behavior when using a public good. The consequences are externalized. Individuals gain by internalizing benefits and externalizing costs.

Central to the tragedy of the commons is the perception that humans are rational self-interested actors. Actors behave purposefully in maximizing their utility. They assess the costs and benefits associated with possible options and choose the option that they expect will be the most beneficiary to them at no great cost, regardless of the costs to others. This assumption, that humans are rational self-interested actors, serves as the ontological basis for the factors causing a tragedy of the commons to arise.

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