Case Study #17

Name
Professor’s Name
Subject Title
Date
The Tragedy of the Commons
Definition
This is an economic problem where every person tries to gain and reap the most significant benefit from any given resource. The tragedy of the common is a situation which occurs when a person neglects the well-being of the entire society for personal gains only. This economic problem occurs when the demand of a particular service or products overwhelms the supply of the same, and the consumption of an additional unit of the resource directly affects the other person negatively where the person is not in a position to enjoy the benefit of the resource. This economic problem is as a result of the increased human population where the supply of a resource is unable to offer enough satisfaction to the whole society (Iizuka & Katz, 2017).
Case study application
The villagers measured the marginal benefit of adding a new calf to the small herd as an addition of a source of meat and milk and leather which was a substantial benefit both for the farmer and the whole household. The marginal cost to this addition of one calf in the land of the common was that if the farmer added one calf to the common property after its birth the goodness of the grass in the area of commons would decrease and as a result the quality of the cattle might diminish as they will have to forage harder which may lead to thinness of the animals.
Measuring marginal benefit and cost
The tragedy of the common found its way in the village as all the villagers overlook the marginal benefit neglecting the cost associated with it.

By adding a single calf in the grazing land the population in the grazing land increased, and the grass grew to an unfortunate shape, and finally, the area of the common was just bare ground. As a result of diminished grass, the cows turned to be thinner than they were before. The number of cattle’s had increased, but the land of common couldn’t support them and hence the number of cows diminished and farmers had to struggle another way out.
Real-life tragedy of commons and control
Example of a resource that suffers from the tragedy of the commons is forested. When people cut down trees from the forest for making money through charcoal and timbers the number of trees diminishes and deforestation may lead to desertification and displacement of wildlife to human land. Humans can avoid misusing the commons through overlooking at the marginal cost more than the marginal benefits.
Reference
Iizuka, M., & Katz, J. (2017). Natural resource industries, tragedy of the commons’ and the case of Chilean salmon farming. Institutions and Economies, 259-286.