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Problem of the Commons

Problem of the Commons (or Tragedy of the Commons) An example in game theory which is used to explore problems of resource distribution (see G. Hardin , ‘The Tragedy of the Commons’, Science, 1968
). The use of commons (publicly available land on which farmers graze their cattle) becomes a problem when one such farmer reasons that he or she can expand his or her herd since this small addition to the total stock will contribute little harm to the available pasture. However, if other farmers reason likewise, these incremental additions to the stock using the land lead to overgrazing and thus the destruction of the resource itself. In other words, if each individual in this situation rationally pursues his or her own short-term interest while disregarding others similarly pursuing theirs, then the long-run consequence is that everyone loses their share in the collective resource.

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