The Tragedy of the commons
When access is open and individual users don’t bear the full cost of their consumption, shared resources are overused and degraded.
author
Garrett Hardin (building on earlier economics of common-pool resources)
Model type
About
Hardin’s 1968 essay framed a general problem in economics and governance: common-pool resources that are rivalrous but hard to exclude users from tend to be over-exploited. Solutions real organisations use include property rights, quotas, pricing, and cooperative rules with monitoring.
How it works
Open access → each actor captures private benefit but shares depletion cost.
Negative externalities → marginal private cost < marginal social cost.
Rational overuse → “if I don’t take it, someone else will.”
Feedback failure → no price or rule to signal scarcity → collapse or chronic congestion.
Negative externalities → marginal private cost < marginal social cost.
Rational overuse → “if I don’t take it, someone else will.”
Feedback failure → no price or rule to signal scarcity → collapse or chronic congestion.
Use cases
Enterprise capacity – shared services, data lakes, build agents, GPU clusters, meeting rooms.
Product/platform – API rate limits, spam/abuse controls, freemium throttles, fair-use policies.
Operations – on-call rotations, tech debt “commons,” internal knowledge bases.
ESG-agnostic resource governance – fisheries, spectrum, urban road space, water rights.
M&A integration – post-deal shared platforms where units overdraw common capacity unless priced/quotad.
Product/platform – API rate limits, spam/abuse controls, freemium throttles, fair-use policies.
Operations – on-call rotations, tech debt “commons,” internal knowledge bases.
ESG-agnostic resource governance – fisheries, spectrum, urban road space, water rights.
M&A integration – post-deal shared platforms where units overdraw common capacity unless priced/quotad.
How to apply
Define the commons – what’s rivalrous and hard to exclude (capacity, attention, budget)? Who uses it?
Measure utilisation & harm – peak load, wait times, failure rates, degradation curve.
Pick a control (often a blend): Property/tenancy – allocate ownership or reservations; make units responsible for outcomes.
Quotas – per-user caps, fair-share schedulers, booking windows.
Pricing – congestion pricing, internal chargebacks/showbacks, overage fees.
Clubs – restrict access; membership rules + monitoring and graduated penalties.
Tradable permits – cap-and-trade for scarce capacity (e.g. API calls, emissions).
Instrument and enforce – transparent dashboards, alerts, audit trails, automated limits.
Review – adjust caps/prices as demand or capacity shifts.
Measure utilisation & harm – peak load, wait times, failure rates, degradation curve.
Pick a control (often a blend): Property/tenancy – allocate ownership or reservations; make units responsible for outcomes.
Quotas – per-user caps, fair-share schedulers, booking windows.
Pricing – congestion pricing, internal chargebacks/showbacks, overage fees.
Clubs – restrict access; membership rules + monitoring and graduated penalties.
Tradable permits – cap-and-trade for scarce capacity (e.g. API calls, emissions).
Instrument and enforce – transparent dashboards, alerts, audit trails, automated limits.
Review – adjust caps/prices as demand or capacity shifts.
pitfalls and cautions
One-size-fits-all fixes – context matters; small groups can self-govern with norms, large systems need pricing or hard caps.
Perverse incentives – sloppy chargebacks drive hoarding; quotas without trading waste capacity.
Misclassification – some resources are club goods (excludable); access control may beat pricing.
Ignoring dynamic supply – invest in capacity when it’s cheaper than ever-tighter rationing.
Anticommons risk – too many vetoes or rights fragments can underuse the resource; balance governance.
Perverse incentives – sloppy chargebacks drive hoarding; quotas without trading waste capacity.
Misclassification – some resources are club goods (excludable); access control may beat pricing.
Ignoring dynamic supply – invest in capacity when it’s cheaper than ever-tighter rationing.
Anticommons risk – too many vetoes or rights fragments can underuse the resource; balance governance.