Term to Own: Tragedy of the Commons

Term to Own: Tragedy of the Commons

This is going to be a relatively short and simple post. I am going to just write word for word the explanation of the tragedy of the common from Ken Binmore’s Game Theory: A Very Short Introduction:

“A hundred families keep goats that graze on some common land. Total milk production is maximized with a thousand goats in all. How many goats should each family keep to maximize its own milk production? At first sight the answer seems to be ten, but it isn’t an equilibrium for each family to keep ten goats. If all the other families keep 10 goats, your family’s optimal strategy isn’t to do the same. You will do better by grazing one goat more, because your family will enjoy all the benefit from the extra goat, while its cost in terms of less grass for the other goats to eat will be shared by the whole community. Families will therefore add extra goats to their herd until the common is reduced to a desert. But this outcome is very inefficient indeed.”

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Posted on October 1, 2011, in Uncategorized and tagged , , , , , , , , , , , . Bookmark the permalink. 1 Comment.

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