Endogenous Provision and Appropriation in the Commons

Abstract

"When a resource is under common property, access is restricted to members of the community, creating the potential of avoiding the tragedy of the commons that characterizes resource use under open access. Serious difficulties remain, however, in managing the resource in a way that is socially optimum because of the rival nature of appropriation by individual members. Achieving the social optimum requires either inducing a non-cooperative behavior by individual members that mimics what cooperative behavior would dictate, or inducing cooperative behavior. A number of set ups have been identified where the first holds, for instance when the payoffs correspond to a chicken game, an assurance game, or tit-for-tat, or the Folk Theorem in repeated games."