CommonResources

The textbook definition of a 'Common Resource' is a good that is non-excludable but rival.

The classic example involves goat farmers in the CommonsProblem.

I am not completely sure about this definition at the moment.

1. Suppose that the goat-farmers' common (see CommonsProblem) is made excludable eg. with a high fence, goat police etc., in order to stop overconsumption. Is it right to say this is no longer a common resource? My inclination is to say it is still a common resource, but one where the 'Problem' can be solved.

1. An example of a non-excludable (but rival) good that is not a common resource - there is enough grazing land for just one goat to graze. There is no way this good could be used in common, but it may not be excludable. Eg. the plot of land is in the middle of all the farmers' private holdings, and it is impracticable to fence it or for anyone to otherwise make it private property. Whoever gets there first will consume all.

You might say - such a good is 'excludable' just because whoever gets there first and consumes it necessarily 'excludes' anyone else from consuming.

But on the other hand - any common resource is going to be to some extent 'excludable' in this way, whether it is the first one the or first 200 consumers who use it all up.

Intuitively, my feeling is the commons problem involves a form of 'cheating' parallel to freeriding in the public good problem. In the public good problem, an individual freerider's contribution won't be missed but if enough individuals freeride the good won't be produced. In the commons problem, an individual's consumption won't deplete the common resource, but if enough individuals overconsume the resource will be squandered.

This parallel is not captured if common resource is just defined by excludability.

Todd Sandler and Daniel Arce get the parallelism between public goods and common resources by distinguishing the two with cost-benefit structure:

('Pure Public Goods versus commons - Benefit-Cost Duality' (2002).

http://www-rcf.usc.edu/~tsandler/CommonsComp.pdf))

Their basic point is:

Pure Public Good - benefits public, costs private

Commons - benefits private, costs public

I.e in public good - everyone benefits, but costs are only borne by contributors. In commons problem, only users of commons benefit, but everyone suffers from degradation of commons.

Sandler & Arce illustrate this with 2-person prisoners dilemma payoff matrices:

Pure Public Good

|| Don't contribute || 0,0 || 5,-3||

|| Contribute || -3,5 || 2,2 ||

Commons

|| graze || -2,-2 || 3,-5||

|| Don't graze ||-5,3 || 0,0 ||

However I'm not completely sure about this either. The parallel between users and contributors is not exact. In public good situation benefitors (beneficiaries?) are a larger group than contributors. In at least some formulations of a commons problem this would not be the case - eg everyone overgrazes in one period, and everyone suffers the consequences in the next.

hmm

Note - of course the two matrices above are just the same prisoners' dilemma with different nominal values. The Nash equilibrium is analogous - 'don't contribute, don't contribute' or 'graze, graze.' The problems are mirrors of each other with 'action' desirable in one case and 'inaction' in the other.

However these writers claim this does make for effective differences:

i. in public good problem there is 'exploitation of the large by the small'. I.e. individuals with high effective demand for the good produce the good and others freeride. After Olson, this tends to be interpreted as high income or 'large' individuals paying for the good, and so the 'small' are seen as exploiting the large. Though it could also mean those with the greatest need or preference for the good pay - and often it will be the poor who have the greatest need for public goods.

In commons problem this is reversed - larger users snaffle up more of the commons.

ii. there are different implications for possible solutions to the problems.

• In the public good problem, one solution is to introduce 'selective incentives' - this must become 'selective punishments' in the commons problem. (Cites Heckathorn

• There may be solution technologies such as 'weakest link' contributions that work for public goods but have no counterpart in commons problem, or vice versa, (must come back to this in SolvingCollectiveActionProblems).

See also GardensAndGiftEconomies