Tragedy of The Commons

The tragedy of the commons is a concept that denotes a specific type of social dilemma in which interdependent individuals face incentives to choose independent actions that maximize their individual benefit but generate a suboptimal aggregate outcome. Garrett Hardin is credited with first introducing the concept to describe the potential conflict between individual rationality and collective efficiency inherent in the management of a common-pool resource (CPR). A CPR is a natural or man-made resource characterized by a low [Page 2644]degree of excludability and a high degree of subtractability. Excludability refers to the feasibility and hence costliness of excluding potential users from using a resource; subtractability, on the other hand, concerns whether a user's appropriation of units from the resource would reduce the amount of the units available to others. The two physical attributes generate what are known as provision problems facing individuals managing a CPR. Once a CPR is provided, it is difficult to exclude potential users from using the resource, regardless of whether or not they have contributed to the resource's provision. A rational individual who considers the costs and benefits of alternative courses of action would find no incentive to contribute and instead would wait for others to provide the resource. Collective inaction is often the outcome.

In his famous 1968 article in Science, Hardin depicted a hypothetical world of a pasture open to all. Every herder faced the incentive that by bringing in an additional animal to graze in the pasture, he would reap all the benefit generated by the additional animal but bear only a small fraction of the cost of overgrazing. A rational herder facing such a cost–benefit calculus would likely choose to bring in as many animals to the pasture as possible to maximize his short-term personal gain. When every herder adopted the same calculus and acted on it, however, the collective outcome would be a complete depletion of the pasture—an outcome that would harm every herder. As Hardin pointed out, what makes the situation a tragedy is not the unhappy ending per se but the remorselessness involved. Although every herder would see the predicament coming, they would find themselves trapped in a dilemma from which they could not escape.

The tragedy of the commons is in fact one type of social dilemma in which interdependent individuals face the incentive to make independent choices that, while maximizing short-term individual benefit, collectively generate an inefficient aggregate outcome. The outcome is inefficient because there is at least one alternative that can generate a higher level of collective gain benefiting all the individuals involved. While the individuals are fully cognizant of their contributing to the sub-optimal situation by failing to exercise temperance and restraint, they find themselves left with no choice but to continue to pursue short-term interest so as to avoid falling prey to others. In a social dilemma, aggregate inefficiency is not necessarily a result of evil acts by some malicious culprits who means to harm others. Even for a group of benign and innocent individuals, as long as they have to choose independent actions in an interdependent situation and are unable to read others' minds, the possibility of a social dilemma always exists.

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