Tragedy of the Tragedy of the CommonsCommons

Ms RossMs Ross

March 2008March 2008

Economic MysteryEconomic Mystery

• Under present regulations, relatively Under present regulations, relatively few whales are killed by whalers few whales are killed by whalers each year. But millions of chickens each year. But millions of chickens are killed and eaten every day. Yet are killed and eaten every day. Yet there are too few whales, while there are too few whales, while chickens are abundant.chickens are abundant.

• Why are there so few whales and so Why are there so few whales and so many chickens?many chickens?

The Tragedy of the The Tragedy of the CommonsCommons

• When property is held in common When property is held in common rather than owned by individuals, it rather than owned by individuals, it tends to be overused and degraded.tends to be overused and degraded.

• Each person who uses it gains the Each person who uses it gains the full benefit of use. However, he or full benefit of use. However, he or she does not bear the full costs of she does not bear the full costs of this use. These costs are shared by this use. These costs are shared by all the other users– the common all the other users– the common owners.owners.

The Tragedy of the The Tragedy of the CommonsCommons

• No one has a strong incentive to No one has a strong incentive to conserve, care or invest in resources conserve, care or invest in resources owned in common. owned in common.

• This is because a person who tries to This is because a person who tries to conserve, care or invest in the conserve, care or invest in the resource cannot prevent others from resource cannot prevent others from using it.using it.