IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v2y1996i1p399-421.html
   My bibliography  Save this article

Two versions of the tragedy of the commons

Author

Listed:
  • Hervé Moulin
  • Alison Watts

Abstract

The commons are a one input-one output production process with increasing marginal cost. In the average return game, each agent chooses his input contribution and total output is shared in proportion to individual contributions. In the average cost game, each agent chooses his output share and total input cost is shared in proportion to individual demands. The tragedy is that the non cooperative equilibrium results in inefficient overutilisation of the technology. We prove formally the tragedy when preferences are convex and both goods are normal. This result has not bee proved previously on such a general preference domain. We also show that overutilisation is less severe in the average cost game than in the average return game.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Hervé Moulin & Alison Watts, 1996. "Two versions of the tragedy of the commons," Review of Economic Design, Springer;Society for Economic Design, vol. 2(1), pages 399-421, December.
    • Handle: RePEc:spr:reecde:v:2:y:1996:i:1:p:399-421
    DOI: 10.1007/BF02499143
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02499143
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02499143?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Watts, Alison, 1996. "On the Uniqueness of Equilibrium in Cournot Oligopoly and Other Games," Games and Economic Behavior, Elsevier, vol. 13(2), pages 269-285, April.
    2. Kitch, Edmund W, 1977. "The Nature and Function of the Patent System," Journal of Law and Economics, University of Chicago Press, vol. 20(2), pages 265-290, October.
    3. Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(3), pages 395-410.
    4. Bryant, John, 1987. "The Paradox of Thrift, Liquidity Preference and Animal Spirits," Econometrica, Econometric Society, vol. 55(5), pages 1231-1235, September.
    5. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-1037, September.
    6. Roemer, J.E., 1988. "On Public Ownership," Papers 317, California Davis - Institute of Governmental Affairs.
    7. Martin Shubik, 1962. "Incentives, Decentralized Control, the Assignment of Joint Costs and Internal Pricing," Management Science, INFORMS, vol. 8(3), pages 325-343, April.
    8. Romano, Richard E., 1988. "Oligopolistic competition for market share via voluntary excess supply," International Journal of Industrial Organization, Elsevier, vol. 6(4), pages 447-468.
    9. Moulin Herve & Shenker Scott, 1994. "Average Cost Pricing versus Serial Cost Sharing: An Axiomatic Comparison," Journal of Economic Theory, Elsevier, vol. 64(1), pages 178-201, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leroux, Justin, 2005. "Strategyproof Profit Sharing: A Two-Agent Characterization," Working Papers 2005-04, Rice University, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Friedman, Eric & Moulin, Herve, 1999. "Three Methods to Share Joint Costs or Surplus," Journal of Economic Theory, Elsevier, vol. 87(2), pages 275-312, August.
    2. Hervé Moulin & Yves Sprumont, 2007. "Fair allocation of production externalities : recent results," Revue d'économie politique, Dalloz, vol. 117(1), pages 7-36.
    3. Watts, Alison, 2002. "Uniqueness of equilibrium in cost sharing games," Journal of Mathematical Economics, Elsevier, vol. 37(1), pages 47-70, February.
    4. Moulin, Herve & Sprumont, Yves, 2006. "Responsibility and cross-subsidization in cost sharing," Games and Economic Behavior, Elsevier, vol. 55(1), pages 152-188, April.
    5. Sprumont, Yves, 2000. "Coherent Cost-Sharing Rules," Games and Economic Behavior, Elsevier, vol. 33(1), pages 126-144, October.
    6. Sprumont, Yves, 1998. "Ordinal Cost Sharing," Journal of Economic Theory, Elsevier, vol. 81(1), pages 126-162, July.
    7. Hervé Moulin, 2008. "The price of anarchy of serial, average and incremental cost sharing," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 379-405, September.
    8. Koster, M., 2005. "Cost Sharing, Differential Games, and the Moulin-Shenker Rule," CeNDEF Working Papers 05-07, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    9. Chen, Zhi & Hu, Zhenyu & Tang, Qinshen, 2020. "Allocation inequality in cost sharing problem," Journal of Mathematical Economics, Elsevier, vol. 91(C), pages 111-120.
    10. Moulin, Herve & Sprumont, Yves, 2005. "On demand responsiveness in additive cost sharing," Journal of Economic Theory, Elsevier, vol. 125(1), pages 1-35, November.
    11. Angeles de Frutos, M., 1998. "Decreasing Serial Cost Sharing under Economies of Scale," Journal of Economic Theory, Elsevier, vol. 79(2), pages 245-275, April.
    12. Koster, M., 2005. "Sharing Variable Returns of Cooperation," CeNDEF Working Papers 05-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    13. Pham, Ngoc Anh, 2019. "Lorenz comparison between Increasing serial and Shapley value cost-sharing rules," Economics Letters, Elsevier, vol. 179(C), pages 49-52.
    14. Moulin, Herve, 2002. "Axiomatic cost and surplus sharing," Handbook of Social Choice and Welfare, in: K. J. Arrow & A. K. Sen & K. Suzumura (ed.), Handbook of Social Choice and Welfare, edition 1, volume 1, chapter 6, pages 289-357, Elsevier.
    15. Yves Sprumont, 2008. "Nearly serial sharing methods," International Journal of Game Theory, Springer;Game Theory Society, vol. 37(2), pages 155-184, June.
    16. Maurice Koster, 2012. "Consistent cost sharing," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 75(1), pages 1-28, February.
    17. Schouten, Jop & Groote Schaarsberg, Mirjam & Borm, Peter, 2020. "Cost Sharing Methods for Capacity Restricted Cooperative Purchasing Situations," Discussion Paper 2020-017, Tilburg University, Center for Economic Research.
    18. Bergantiños, Gustavo & Valencia-Toledo, Alfredo & Vidal-Puga, Juan, 2016. "Consistency in PERT problems," MPRA Paper 68973, University Library of Munich, Germany.
    19. Yves Sprumont, 2010. "An Axiomatization of the Serial Cost-Sharing Method," Econometrica, Econometric Society, vol. 78(5), pages 1711-1748, September.
    20. Hougaard, Jens Leth & Thorlund-Petersen, Lars, 2001. "Mixed serial cost sharing," Mathematical Social Sciences, Elsevier, vol. 41(1), pages 51-68, January.

    More about this item

    Keywords

    D62; D72; Externalities; Tragedy of the commons; Cost sharing; Surplus sharing; Average cost; Average return;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:2:y:1996:i:1:p:399-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.