| Abstract: | Suppose that land is communally owned. Every person has theright to hunt, till, or mine the land. This form of ownershipfails to concentrate the cost associated with any person's exerciseof his communal right on that person. If a person seeks to maximizethe value of his communal rights, he will tend to overhunt andoverwork the land because some of the costs of his doing soare borne by others. The stock of game and the richness of thesoil will be diminished too quickly. It is conceivable thatthose who own these rights, i.e. every member of the community,can agree to curtail the rate at which they work the lands ifnegotiating and policing costs are zero... However,] negotiatingcosts will be large because it is difficult for many personsto reach a mutually satisfactory agreement, especially wheneach hold-out has the right to work the land as fast as he pleases.Furthermore,] even if an agreement among all can be reached,we must yet take account of the costs of policing the agreement,and these may be large, also.
Footnotes
1 I have benefited greatly from comments made by David Pearceon an earlier draft of this paper. |
