Fishing Commons Game

A lake like this is a common resource. It is rival: a fish you catch is one nobody else can catch. But it is not excludable: nobody can easily be kept out. So each fisher keeps the whole value of an extra fish, while the cost of a smaller stock is shared by everyone. Each one has a reason to take more, and together they can wipe the fish out. This is often called the tragedy of the commons.

It happens in real seas. Off Canada's east coast, new trawling technology let fishers take cod faster than the stock could replace itself, and the official quotas were set too high. By 1992 the northern cod stock had fallen to about 1% of its historic level, and the government banned fishing for it. More than 35,000 fishers and fish-plant workers lost their jobs, and the ban, meant to last two years, was extended indefinitely.

The usual fixes are a quota set by government, or private ownership. The political scientist Elinor Ostrom showed a third way. In Governing the Commons (1990) she drew on irrigation systems in Spain and the Philippines, mountain villages in Switzerland and Japan, and fisheries in Nova Scotia and Indonesia, where local users managed a shared resource with their own rules: clear limits on who may use it, users who watch each other, and penalties that start small and grow for repeat offenders. In 2009 she became the first woman to win the Nobel prize in economics.