The Tragedy of the Commons

By Deane Barker •

Also known as: Externality

A action by one person or organization might benefit only the actor, but often has a cost which is distributed among many others. Sourced from an 1833 economist, and expanded on (and popularly named) in a 1968 essay.

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Examples

If I pollute the atmosphere to make money, everyone pays the price in poorer air quality, but only I get the benefit of revenue. The upside only benefits me, while I experience only a tiny fraction of the downside.

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