4. The Institutions and "The Commons" Flashcards
(15 cards)
Define Prisoner’s Dilemma
A game-theoretical situation in which multiple individuals making decisions in pursuit of their own interests tend to create collective outcomes that are non-optimal for everyone.
- A situation where people, by acting in their own self-interest, end up creating a worse outcome for everyone.
Example: Prisoner’s Dilemma
Deforestation in a community forest:
If all villagers only take a small amount of wood, the forest stays alive and provides resources for everyone.
But if some villagers cut more trees to get extra wood quickly, others fear they will lose out and start cutting too.
The result: the forest is destroyed, hurting the whole community.
Define Game Theory
-A form of applied mathematics used to model and predict people’s behavior in strategic situations where people’s choices are predicated on predicting the behavior of others.
-An applied math used to study and predict how people make decisions when their choices depend on what others might do.
Expound Game Theory
Game theory uses mathematical analysis to study how people make decisions in situations where they must predict the actions of others. It focuses on problems where guessing, bluffing, and second-guessing are important, like in the Prisoner’s Dilemma. Developed by John von Neumann after World War II, game theory sees a “game” as a conflict where everyone’s choices together decide the outcome. Although cooperation usually gives the best results, individuals often have strong reasons not to cooperate. Game theory can model simple or very complex situations, including ones with money rewards, punishments, and long-term consequences like retaliation or collapse.
Explain the tragedy of the commons
applying game theory logic to environmental and societal issues. individuals acting in their own self-interest will inevitably overexploit shared resources, leading to environmental degradation. “how rational individual decisions cause collective ruin.”
Hardin believed that conscience and goodwill were insufficient solutions; instead, either coercive governance or privatization of resources was necessary to prevent tragedy.
Expound the Tragedy of the Commons
- Hardin’s Main Argument: Shared resources (“commons”) inevitably get overexploited because individual incentives favor overuse, leading to resource collapse.
- Freedom in Commons Leads to Ruin: Without regulation or ownership, common resources are doomed to be depleted.
Solutions Proposed by Hardin:
1. Coercive Restraint: Strong governance or “mutual coercion mutually agreed upon.”
2. Privatization: Assign private property rights to ensure responsibility and accountability.
What evidences began to emerge that contradicted Hardin’s predictions.
Studies from various disciplines revealed examples of effective resource management systems that didn’t rely on coercive enforcement or private property rights. Instead, communities often managed resources through informal institutions, norms, and rules, which enabled cooperation and sustainable outcomes. These systems, referred to as “common property”, involved shared group ownership, not exclusive private control. Scholars like Elinor Ostrom challenged the assumptions of game theory, showing that when people can communicate and negotiate, cooperation becomes more likely. The “neo-institutionalist” approach emphasized that commons could be effectively managed through social rules and “institutions” that encouraged collaboration.
Institutions definition
- Rules and norms governing
collective action, especially to manage shared natural resources like rivers, oceans, or the air.
Example: In Maine lobster fisheries, local fishers create and follow their own rules about who can fish, how many traps they can use, and where they can fish — all to prevent overfishing without needing heavy government control.
Common Property definition
- A good or resource (e.g., bandwidth, pasture, oceans) whose characteristics make it difficult to fully enclose and partition, making it possible for non-owners to enjoy resource benefits and owners to sustain costs from the actions of others, typically necessitating some form of creative institutional management
- A resource (like pasture, oceans, or internet bandwidth) that is hard to divide and control, where people who don’t own it can still use it, often requiring special rules to manage it fairly.
Common Property example
The Amazon Rainforest is a huge natural resource that is hard to divide among countries and local groups. It provides benefits like oxygen and climate regulation to everyone, but deforestation by some causes harm to all.
The Montreal Protocol
Chlorofluorocarbons (CFCs), widely used since the 1920s for refrigeration, firefighting, and spray cans, were prized for their non-reactivity. However, it was later discovered that CFCs severely damage the ozone layer by releasing chlorine that breaks down ozone molecules, creating dangerous ozone holes. Because CFCs are long-lasting and vital to many industries, stopping their use was difficult and created a classic common property and Prisoner’s Dilemma problem. Despite high costs and incentives to cheat, global collective action led to the Montreal Protocol in 1987, an international treaty banning most CFCs. Strengthened over time, the Protocol is seen as one of the most successful environmental agreements and a model for tackling other global issues like climate change.
Crafting Sustainable Environmental Institutions: Institutional thinkers have identified key rules that help manage common resources, Elinor Ostrom outlined important design principles for success:
Boundaries: Clear limits on who can use the resource and where.
Proportionality: Costs and benefits must be fairly balanced among users.
Collective Choice: Users must participate in setting and changing the rules.
Monitoring: Use of the resource and its health must be regularly checked.
Sanctions: Rule-breaking should be discouraged with fair, gradual punishments.
Conflict Resolution: Systems must exist to settle disputes easily and cheaply.
Autonomy: Local groups must have authority without interference from higher powers.
What is the he Biggest Commons
The global climate is a commons that is hard to control because exclusion is difficult and individual costs for protecting it are high. However, through collective agreements like the Kyoto Protocol, countries aim to manage climate change by setting mutual rules, even without a global authority. Like managing a fishery, challenges include monitoring, enforcing sanctions, and revising rules, making creative institutional solutions crucial for success.
- Coordination around such problems fails owing to the “____,” —
“Prisoner’s Dilemma”- a metaphor describing the tendency of individuals to rationally seek their immediate gain at the expense of greater gains that might have been made through cooperation.
Such failure to cooperate around environmental problems typically leads to a “___” where —
Tragedy of the Commons; where collective goods (e.g., air, water, biodiversity) are degraded.
