Simulating the role of institutions on the use of common pool resources

Abstract

In 1968, Garrett Hardin identified a class of common goods that suffer under traditional market mechanisms. As a result, institutions become pivotal in defining acceptable consumption behavior. This paper describes the results of an agent-based computer simulation used to study how institutional forces shape consumption patterns. The results suggest common-interested behaviors support a greater population at a higher quality of living; however, exclusively common-interested behaviors result in underutilized commons, and the whole is generally less well off. Overall, when populations generally act in the common-interest, the commons, the population and individuals all experience higher quality outcomes than when they act in generally or exclusively self-interested ways. The paper frames further applications in terms of managing growth for long-term sustainability.