Question

What is the tragedy of the commons? How can it be avoided?

Short answer

The 'tragedy of the commons' refers to how individuals acting in their own self-interest can deplete a shared resource, harming the overall group. Example include overfishing and deforestation. To prevent this, solutions include boundaries for resource use, rules limiting use, monitoring and enforcing compliance, government regulation, and privatization

Step-by-step solution

Definition of Tragedy of the Commons

The 'tragedy of the commons' is an economic problem in which every individual tries to reap the greatest benefit from a given resource. As the demand for the resource outpaces supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits. For example, overfishing may lead to a shortage of fish, negatively impacting all fishermen.

Examples of Tragedy of the Commons

Real-world examples of the tragedy of the commons include overfishing in the ocean, deforestation of rainforests, overuse of water resources, and pollution from carbon emissions.

Prevention

This tragedy can be avoided by collective agreement and action to manage the common resource. Strategies include defining clear boundaries for resource use, establishing rules that limit the timing and quantity of resource use, and monitoring and enforcing compliance with these rules. Regulation by government and the implementation of property rights are also potential solutions. Privatization can also work, as it gives ownership to individuals who then have an interest in maintaining the resources.