Tragedy of the Commons
The tragedy of the commons occurs when common pool resources (shared but rival goods) are overexploited because users do not fully internalise the cost of depletion. Individual rational behaviour leads to collectively irrational overuse.
Real World
North Sea cod stocks collapsed in the early 2000s because individual fishing boats maximised their own catch, ignoring the cumulative depletion. The EU eventually imposed strict quotas to allow stocks to recover.
Exam Focus
Distinguish common resources (rival, non-excludable) from public goods (non-rival, non-excludable) — a frequent source of lost marks.
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