The Tradeoff of the Commons
Alan D. Miller
University of Haifa - Faculty of Law; University of Haifa - Department of Economics
R. Preston McAfee
Yahoo! Research Labs
March 15, 2012
Journal of Public Economics, Vol. 96, No. 3-4, 2012
We develop a model of scarce, renewable resources to study the commons problem. We show that, contrary to conventional wisdom, property rights can often be less efficient than a commons. In particular, we study two effects: (1) waste which arises when individuals expend resources to use a resource unavailable due to congestion and (2) the risk of underutilization of the resource. We provide necessary and sufficient conditions for each effect to dominate the other when the cost of determining the availability of a resource is low.
Keywords: Tragedy of the Commons, Spectrum, Open Access, Appointments, Property Rights, Reservations
JEL Classification: D23, D45, K23Accepted Paper Series
Date posted: November 4, 2010 ; Last revised: May 24, 2012
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo7 in 0.563 seconds