Private Goods, Public Goods and Common Pools with Homo Reciprocans
Cox, James
Citations
Abstract
Social dilemmas characterize environments in which individuals’ exclusive pursuit of their own material self-interest can produce inefficient outcomes such as those resulting from under-provision of public goods and over-appropriation of common pool resources. Underprovision is manifested in foregone opportunities to create surplus through provision of a public good with greater value than the sum of its private costs. In a conceivable extreme outcome, free-riding on voluntary provision can lead to outright failure to provide a public good. Over-appropriation is manifested in realized destruction of surplus through appropriation of private goods with a sum of values less than the value of the common pool that has been exploited. In a conceivable extreme outcome, competition under the “rule of capture” for appropriation can lead to destruction of the common pool, a tragedy of the commons.