Realized 1031 Glossary of Terms

Tragedy of the Commons

Written by The Realized Team | Jun 22, 2022 12:00:00 PM

The Tragedy of the Commons is an economic problem where individual use depletes a resource, removing it from use by the general population. Because each individual is concerned only about their benefit from the use of the resource, no one individual is looking out for the welfare of the common resource. There is no investment in the well being or management for the resource’s future. Every individual pursues the use of the resource for their personal gain.

Some solutions to the Tragedy of the Commons include privatization and government intervention. Through privatization of the resource, owners will ensure the resource is taken care of, so it continues to benefit them and potentially others (for a price). Government intervention may place restrictions on the use of the resource to ensure it is not depleted.