Tragedy Of The Commons: Type Of Good

Kaydee Robison

Econ 145

Assignment #1

Assignment #1: Commons

A common property resource is a type of good that is rival but non-excludable. It is difficult and costly to prevent other people from benefitting from its use usually because of the good’s vastness, such as the ocean. Because it is challenging to protect the good, the good is available for all to use and take advantage of. People are inherently selfish and will exhaust a resource in order to gain, but they do not realize that they are only hurting their future selves in the process. If people assume the world’s resources are infinite then they will only increase human misery by abusing the resources and not considering the carrying capacity of the land (Hardin 1968). With each

The Tragedy of the Commons is a product of fear; fear that others will exploit the resource before you have a chance. Each party has an incentive to overuse. The person who overuses gains a positive utility but, because the common resource is shared by all humankind the person only feels a fraction of the negative utility that is divided between everyone (Hardin 1968). The overusing individuals only choose to see the positive benefits so they keep straining the common resource. The common resource becomes used up more than is desirable from the standpoint of society as a whole (Squire’s lecture). These harmful practices lead to problems such as depletion, pollution, congestion, and degradation of a common property resource. The world doesn’t have to end up in this sad state though;

People could be educated about their hurtful habits and alternative ways to do things (Hardin 1968). When people understand how they are destroying the environment and only hurting themselves, they may stop overusing the common resources in excess. Another way to help resolve the commons problem is by limiting access, through the use of common property rights. A property right is a bundle of characteristics that conveys certain powers to the owner of that right (Squire’s lecture). A common property right is owned by an identified group of people that maintain property through constraints such as rules, social norms, incentives and legal contracts. Some threats to common property rights are that rules and resource use can break down if a group becomes too large, an individual may break the rules to maximize their utility at expense to the community and new technology may persuade rule breaking. The members of the community must consume less of a resource than private incentives demand and invest more to maintain and enhance the value (Squire’s lecture). Unfortunately people are unlikely to cooperate without an “external agent” forcing the overexploitation agreements, and only through the private enclosure or state regulation can they prevent the overexploitation of goods (Wade 1987). One way to help motivate people into following the regulations is by having