5. Common resources and the tragedy of the commons Shen, Antonio, and Dmitri are

Question

5. Common resources and the tragedy of the commons

Shen, Antonio, and Dmitri are hunters who live next to a recreational wildlife game area that is open to hunting; in other words, anyone is free to use the recreational wildlife game area for hunting. Assume that these men are the only three hunters who hunt in this recreational wildlife game area and that the recreational wildlife game area is large enough for all three hunters to hunt intensively at the same time.

Each year, the hunters choose independently how often to hunt; specifically, they choose whether to hunt intensively (that is, to set several traps and hunt long hours, which hurts the sustainability of the recreational wildlife game area if enough people do it) or to hunt nonintensively (which does not hurt the sustainability of the recreational wildlife game area). None of them has the ability to control how much the others hunt, and each hunter cares only about his own profitability and not the state of the recreational wildlife game area.

Assume that as long as no more than one hunter hunts intensively, there are enough animals to restock the recreational wildlife game area. However, if two or more hunt intensively, the recreational wildlife game area will become useless in the future. Of course, hunting intensively earns a hunter more money and greater profit because he can sell more animals.

The recreational wildlife game area is an example of (private good, public good, common resourse or club good ) because the animals in the recreational wildlife game area are (excludable or non excludable )  and (rival in consupmtion or non rival in consumption) .

Depending on whether Antonio and Dmitri both choose to hunt either nonintensively or intensively, fill in Shen's profit-maximizing response in the following table, given Antonio and Dmitri's actions.

Antonio and Dmitri's Actions

Hunt Nonintensively

Hunt Intensively

Which of the following solutions could ensure that the recreational wildlife game area is sustainable in the long run, assuming that the regulation is enforceable? Check all that apply below.

Convert the recreational wildlife game area to private property, and allow the owner to sell hunting rights.

Outlaw hunting intensively.

Develop a program that entices more hunters to move to the area.

Antonio and Dmitri's Actions

Hunt Nonintensively

Hunt Intensively

Explanation / Answer

A common resource is type of a good from whose consumption nobody can be excluded but whose consumption is rival in nature that is consumption by one reduces the quantity available for others.

In the given case, recreational wildlife area is free for used by anyone for hunting purpose. In other words, nobody can be excluded from accessing recreational wildlife area for hunting purpose.

However, hunting by one person reduces the number of animals available for others to hunt.

Thus, the recreational area is an example of common resource because the animals in the recreational wildlife area are nonexcludable and rival in consumption.

It has been stated that no hunter has the ability to control how much other hunters hunt and also each hunter cares about his own profitability.

Secondly, more the number of animals, a hunter hunt, higher is the profitability of hunter.

As each hunter cares about his own profitability and not about the sustainability of recreational wildlife, he will hunt more and more animals as this will increase his profit.

So, to maximize his profit, a hunter will hunt intensively whatever be the strategy of other hunters.

Thus, whatever be the strategy of Antonio and Dmitri, Shen’s profit-maximizing response will be to hunt intensively.

In the given passage, it has been stated that if hunters hunt non-intensively then in that case sustainability of recreational wildlife game area can be maintained. In other words, non-intensive hunting could ensure that the recreational wildlife game area is sustainable in the long-run.

So, if government make the intensive hunting illegal or outlaw the intensive hunting and enforce the rule strictly then only non-intensive hunting will take place and this will keep the recreational wildlife game area sustainable in long-run.

Apart from this, one method of sustainable use of common resource and to prevent tragedy of commons is to assign private property rights to common resource. This assignment of private property right will induce the users to use common resource sustainably as over exploitation is detrimental to their own cause itself.

Thus, converting recreational wildlife game area to private property and allow the owners to sell hunting rights could ensure sustainability of recreational wildlife game area in long-run.

Thus, following are the correct options –

Convert the recreational wildlife game area to private property, and allow the owner to sell hunting rights.

Outlaw hunting intensively.

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