The Tragedy of the Human Commons

Abstract

"In this article, we explore one important example of tragedy of the human commons: health insurers' failure to make long-term investments in improving the health of their common resource, the pool of insureds who switch among them. ... For example, a different solution to tragedy of the human commons in health insurance would be to require insureds (rather than subsequent insurers) to compensate their original insurers when they switch after having received a prospectively efficient treatment."