The tragedy of commons leads to a Nash equilibrium with shared resources that are:
A)turned into privately owned resources.
B)excluded from production.
C)underused.
D)overused.

Question

Quizplus · Accepted Answer

The tragedy of commons occurs when a resource that is shared by many individuals is overused because each person is motivated by their own self-interest and does not consider the negative impact on the overall resource. This leads to a situation where the resource is depleted or damaged, which ultimately harms everyone who relies on it. In a Nash equilibrium, each individual has chosen their best strategy given the strategies of others. In the case of shared resources, the Nash equilibrium is often overuse, as each individual maximizes their own gains by exploiting the resource. Therefore, the best choice is D, overused resources.

The Tragedy of Commons Leads to a Nash Equilibrium with Shared