Shared Resources

This quick article will focus on the importance of collaboration and trust in a community. To demonstrate why collaboration and trust are important, let’s examine their influence through the prism of a common economic, or game theoretic, problem referred to as the “tragedy of the commons”.

Tragedy of the commons describes a situation where individuals each independently act according to their self-interest, but the end result leaves everybody worse off. Essentially, the community depletes a shared resource through acting selfishly.

Original Formulation:

The classic example originates  from the English economist William Lloyd in 1833. He published a pamphlet covering a hypothetical example of exploiting a common resource. The situation concerns cattle herders who share a single piece of land. Each have the ability to let their cows graze as often as they wish, this was customary in English villages Volunteers working on construction siteat that time. Now, should a herder graze more than his share of cattle, overgrazing is the end result. Each additional animal represents additional benefits which accrue solely to the cow’s owner, but the group experiences damage to their common good. Were every herder to make this calculated, and individually, rational economic decision, the previously sustainable common would be destroyed, to the detriment of everyone.

Modern Conception:

The above example is meant to highlight the salient features of the “tragedy of the commons”, but the example is somewhat out of touch with our modern society. Not least of which because it was contrived in 1833 and also because most of us are not cow farmers. However, should we take the above example and apply it to modern society, then there are a few very important take aways which can help us our situation today.

The most apt situation to analyze is our switch towards conscientiously managing the environment. Previous generations viewed the environment as an object to be exploited for maximum benefit. This was largely driven by the belief nature was an inexhaustible resource. As our views evolved, however, individuals michigan ducksbegan to realize the environment needed to be sustainably managed. However, without a proper regulatory framework, this realization was not in and of itself sufficient to spur change.

The incentives still existed for corporations and individuals to maximize their individual benefit, even if this resulted in an overall worse situation for the community. Think of how companies manage their waste. Properly disposing of toxic chemicals and other waste can be very expensive, but is necessary to prevent environmental damage. This damage, though, is widespread and not always immediately obvious. Thus, the incentive for unscrupulous corporations to illegally dispose of their waste.

Interested in learning more about this subject? Here is an excerpt from Wikipedia with a few links:

“The commons dilemma is a specific class of social dilemma in which people’s short-term selfish interests are at odds with long-term group interests and the common good. In academia, a range of related terminology has also been used as shorthand for the theory or aspects of it, including resource dilemma, take-some dilemma, and common pool resource.

Commons dilemma researchers have studied conditions under which groups and communities are likely to under- or over-harvest common resources in both the laboratory and field. Research programs have concentrated on a number of motivational, strategic, and structural factors that might be conducive to management of commons.

In game theory, which constructs mathematical models for individuals’ behavior in strategic situations, the corresponding “game”, developed by Hardin, is known as the Commonize Costs – Privatize Profits Game (CC–PP game).”

 

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