Micro Foundations · intro
What moves on the Tragedy of the Commons diagram
Depletion shifts the whole catch curve inward. The open-access equilibriumequilibriumThe point where opposing forces balance, quantity supplied equals quantity demanded, so there's no pressure for price to change. re-forms at a smaller fleet, but the resource rents are gone.
The tragedy has been running for years: too many boats, each ignoring its effect on the stock.
The fish population finally crashes, as it did with Atlantic cod in the early 1990s.
The average catch curve collapses inward: every boat brings home less at any fleet size.
Boats exit until costs are covered again, but the fleet and the fishery are both far smaller. Prevention beats cure in commons problems.
Examiners ask this as: overfishing, stock collapse, cod collapse, depleted fishery, resource depletion.
Other scenarios on Tragedy of the Commons