A common resource is an non-excludable but rival good; that is, a good that people cannot be prevented from using but where one person’s consumption of the good diminishes another person’s consumption of it. See Non-excludable Good and Rival Good.
Alex Tabarrok (reference below, video on right) describes how common resources can lead to the Tragedy of the Commons.
“Common resources are non-excludable but rival. For instance, no one can be excluded from fishing for tuna, but they are rival – for every tuna caught, there is one less for everyone else. Non-excludable but rival resources often lead to what we call a “tragedy of the commons.” In the case of tuna, this means the collapse of the fishing stock. Under a tragedy of the commons, a resource is often overused and under-maintained.”
Tabarrok explores three methods for solving the common resource problem.
- Command and control
- Cultural norms – sophisticated procedures can develop, particularly with small and stable goods
- Creating property rights – such as New Zealand’s Individual Transferable Quota for fishing
From http://www.mruniversity.com/node/3136001, accessed 10 May 2016.
- At some restaurants and grocery stores, you can buy bison burgers made from farm-raised bison. Is this good news or bad news if we want more bison around?
Atlas topic, subject, and course
Alex Tabarrok, The Tragedy of the Commons (11-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/tragedy-of-the-commons-examples-economics, accessed 10 May 2016.
Page created by: Ian Clark, last modified 109 May 2016.
Image: Alex Tabarrok, Minute 0:15 of The Tragedy of the Commons (11-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/tragedy-of-the-commons-examples-economics, accessed 10 May 2016.