Common Pool Resources

This chapter discusses several attributes of a common pool resource and the impact on the resource by the virtue of selfish individual decision making. Especially, we review the usual theoretical prediction that the commons are endangered or perhaps destroyed through overuse. Since this prediction is based on the assumption that individuals involved to jointly manage a common property have not the opportunity to communicate with each other, we confront this prediction with empirical evidence from field studies and experiments that the resource is used more efficiently if allowance was made for communication at moderate costs among the individuals. Nevertheless, we also present an empirical study where individual firms have failed to enhance the efficiency of a common property although the firms had the opportunity to communicate with each other. Although Cooperation is not likely for all common properties with face-to-face communication between egoists, it seems on the basis of empirical studies that Cooperation is an essential feature to exploit a natural exhaustible resource. Since the appearance of the articles of Gordon (1954) and Hardin (1968) an extensive theoretical literature has been published analyzing exhaustible resource under various economic aspects but Cooperation by direct agreements among individuals who exploit a common property was almost completely neglected in the economic literature. It seems to us that according to the traditional noncooperative view it is a commonly held belief among theorists that the exhaustible resource will be destroyed by individuals following their own inter-ests and therefore it was not within the realms of this methodological approach that selfish individuals will cooperate among themselves to extract an exhaustible natural resource.