Tragedy of the commons

The tragedy of the commons is a metaphor used to illustrate the conflict between individual interests and the common good. The term was popularized by Garrett Hardin in his 1968 Science article "The Tragedy of the Commons."

Hardin uses the example of English Commons, shared plots of grassland used in the past by all livestock farmers in a village. Each farmer keeps adding more livestock to graze on the Commons, because it costs him nothing to do so. In a few years, the soil is depleted by overgrazing, the Commons becomes unusable, and the village perishes.

The cause of any tragedy of the commons is that when individuals use a public good, they do not bear the entire cost of their actions. If each seeks to maximize individual utility, he ignores the costs borne by others. This is an example of an externality. The best (non-cooperative) short-term strategy for an individual is to try to exploit more than his share of public resources. Assuming a majority of individuals follow this strategy, the theory goes, the public resource gets overexploited.

The tragedy of the commons is a source of intense controversy, precisely because it is unclear whether individuals will or will not always follow the overexploitation strategy in any given situation. However, experiments have indicated that individuals do tend to behave in this way

http://en.wikipedia.org/wiki/Tragedy_of_the_commons