Common good (economics)

Common goods (also called common-pool resources) are defined in economics as goods that are rivalrous and non-excludable. Thus, they constitute one of the four main types based on the criteria: whether the consumption of a good by one person precludes its consumption by another person (rivalrousness) whether it is possible to prevent people (consumers) who have not paid for it from having access to it (excludability) As common goods are accessible by everybody, they are at risk of being subject to overexploitation which leads to diminished availability if people act to serve their own self-interests. Common-pool resources are sufficiently large that it is difficult, but not impossible, to define recognized users and exclude other users altogether. Based on the criteria, common goods are: rivalrous: When one person consumes a good, another person is unable to subsequently consume that good and the overall stock of the good decreases. For example, when a fisherman catches a fish, no other fisherman is able to catch that fish. non-excludable: There is no possibility to exclude anybody from consumption of this good. Common goods can be institutions, facilities, constructions or nature itself. As long as it can be used by all members of society and not privately consumed by specific individuals or not all parts of society as private goods. For common goods to be able to exist, in most cases payment of taxes is needed, as common goods are socially beneficial and everyone is interested in satisfy some considered basic necessities. As the government is commonly the agent who drives expenses to create common goods, the community pays an amount in exchange. A society requires to have certain elements in order to succeed in the creation of common goods. Developed countries normally share those elements such as being a democracy and having basic rights and freedoms, a transportation system, cultural institutions, police and public safety, a judicial system, an electoral system, public education, clean air and water, safe and ample food supply, and national defense.

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Overexploitation

Overexploitation, also called overharvesting, refers to harvesting a renewable resource to the point of diminishing returns. Continued overexploitation can lead to the destruction of the resource, as it will be unable to replenish. The term applies to natural resources such as water aquifers, grazing pastures and forests, wild medicinal plants, fish stocks and other wildlife. In ecology, overexploitation describes one of the five main activities threatening global biodiversity.

Common-pool resource

In economics, a common-pool resource (CPR) is a type of good consisting of a natural or human-made resource system (e.g. an irrigation system or fishing grounds), whose size or characteristics makes it costly, but not impossible, to exclude potential beneficiaries from obtaining benefits from its use. Unlike pure public goods, common pool resources face problems of congestion or overuse, because they are subtractable. A common-pool resource typically consists of a core resource (e.g.

Tragedy of the commons

The tragedy of the commons is a metaphoric label for a concept that is widely discussed in economics, ecology and other sciences. According to the concept, should a number of people enjoy unfettered access to a finite, valuable resource such as a pasture, they will tend to over-use it, and may end up destroying its value altogether. To exercise voluntary restraint is not a rational choice for individuals - if they did, the other users would merely supplant them - yet the predictable result is a tragedy for all.

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Discusses venture capital funding, research grants, tragedy of common goods, and intellectual property.

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