The Tradeoff of the Commons

Posted: 4 Nov 2010 Last revised: 24 May 2012

See all articles by Alan D. Miller

Alan D. Miller

Faculty of Law, Western University

R. Preston McAfee

Yahoo! - Yahoo! Research Labs

Date Written: March 15, 2012

Abstract

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, K23

Suggested Citation

Miller, Alan D. and McAfee, Randolph Preston, The Tradeoff of the Commons (March 15, 2012). Journal of Public Economics, Vol. 96, No. 3-4, 2012, Available at SSRN: https://ssrn.com/abstract=1702783 or http://dx.doi.org/10.2139/ssrn.1702783

Alan D. Miller (Contact Author)

Faculty of Law, Western University ( email )

1151 Richmond Street
London, Ontario N6A3K7
Canada

HOME PAGE: http://alandmiller.com

Randolph Preston McAfee

Yahoo! - Yahoo! Research Labs ( email )

Sunnyvale, CA 94089
United States

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