Congestion and the Commons
From Resources Magazine
Managing traditional commons is an age-old problem. In the classic “tragedy of the commons,” people will use a public good without regard for the effect of their actions on others’ access. Private ownership eases congestion by limiting access to the resource and setting an entry price. However, when there are two resource pools, one private and one public, the result can be a worse outcome for all.
In the Fall issue of Resources magazine, authors Carolyn Fischer and Ramanan Laxminarayan demonstrate how “spillover” effects, the displacement of use from protected to unprotected resources, apply to policy challenges ranging from fisheries to antibiotics.
The authors conclude that price-based mechanisms (taxes) are superior to a quantity-based ones (quotas) for limiting congestion spillovers.