The “tragedy of the commons” is a concept that illustrates the overuse and depletion of common-pool resources resulting from individual self-interest.

In economics, the tragedy of the commons describes a scenario in which individuals with unrestricted access to a resource, which is not regulated by the state, act independently based on their own self-interest. This behavior, while beneficial to the individual, ultimately undermines the collective good and leads to the depletion or degradation of that shared resource. The term was popularized by ecologist Garrett Hardin in 1968, although similar ideas were articulated earlier by economists such as William Forster Lloyd.

Common-pool resources are characterized as rivalrous and non-excludable. In this context, “rivalrous” means that one person’s consumption of the resource diminishes its availability for others, while “non-excludable” indicates the difficulty of preventing anyone from accessing the resource. Examples of common-pool resources include fisheries, forests, groundwater basins, and the atmosphere, particularly concerning pollution.

The tragedy of the commons arises because individual users gain direct benefits from utilizing the resource, whereas the costs associated with overuse and depletion are distributed among all users. This leads to an incentive for each user to exploit the resource as much as possible, ultimately harming everyone in the process. For instance, a fisherman benefits directly from catching additional fish, but the resultant decline in the fish population represents a cost shared by all fishermen. If every fisherman prioritizes their self-interest, the fish population may decline to a point where recovery is impossible, negatively impacting all stakeholders involved.

This issue is often intensified by the absence of property rights. When no one owns the resource, there is little motivation for individuals to conserve it. As a result, some economists argue that assigning property rights, or implementing regulations and taxes, could help mitigate the tragedy of the commons. However, these solutions present their own set of challenges and controversies. Key questions include: Who should own the resource? What regulatory measures should be implemented? How can we ensure that the benefits and costs are equitably distributed? These complex questions continue to be subjects of debate within the field of economics.