scholarly journals The Tragedy of the Risk Averse

Erkenntnis ◽  
2020 ◽  
Author(s):  
H. Orri Stefánsson
Keyword(s):  
Decision Problem ◽  
Tragedy Of The Commons ◽  
Noncooperative Game ◽  
Time Slice ◽  
Risk Averse ◽  
Rational Person ◽  
The Future ◽  
The Commons

AbstractThose who are risk averse with respect to money, and thus turn down some gambles with positive monetary expectations, are nevertheless often willing to accept bundles involving multiple such gambles. Therefore, it might seem that such people should become more willing to accept a risky but favourable gamble if they put it in context with the collection of gambles that they predict they will be faced with in the future. However, it turns out that when a risk averse person adopts the long-term perspective, she faces a decision-problem that can be analysed as a noncooperative game between different “time-slices” of herself, where it is in the interest of each time-slice (given its prediction about other slices) to turn down the gamble with which it is faced. Hence, even if a risk averse but rational person manages to take the long-term perspective, she will, in the absence of what Hardin called “mutual coercion”, end up in a situation analogous to the “tragedy of the commons”.

The Effect of Incentives: Diffusion of Responsibility

2021 ◽  
pp. 166-182
Author(s):  
Jason Brennan ◽  
William English ◽  
John Hasnas ◽  
Peter Jaworski
Keyword(s):  
Climate Change ◽  
Collective Action ◽  
Tragedy Of The Commons ◽  
Short Term ◽  
Collective Action Problem ◽  
P Diffusion ◽  
Perverse Incentives ◽  
The Commons ◽  
Diffusion Of Responsibility

Diffusion of responsibility refers to the problem that when something is everyone’s job, it in effect ends up being nobody’s job. This explains why many collective problems arise. People face perverse incentives to free ride on others’ actions and not to do their part. As a result, agents often think in short-term rather than long-term ways. Problems such as climate change can be modeled as instances of the tragedy of the commons, one form of a collective action problem that arises due to perverse incentives created by the diffusion of responsibility.

scholarly journals Whale Watching as Ecotourism: How Sustainable is it?

2014 ◽  
Vol 6 (1) ◽  
pp. 38-55 ◽  
Author(s):  
Stephen Leslie Wearing ◽  
Paul A. Cunningham ◽  
Stephen Schweinsberg ◽  
Chantelle Jobberns
Keyword(s):  
Human Activities ◽  
Tragedy Of The Commons ◽  
Whale Watching ◽  
Local Economies ◽  
Marine Tourism ◽  
Green Industry ◽  
Environmentally Responsible ◽  
The Future ◽  
The Commons ◽  
Tourism Activity

Australia has long tried to portray itself as an environmentally responsible state and has consistently been a strong supporter of Whale Watching as an alternative to the practice of commercial and ‘scientific’ whaling. This paper explores whale watching in an effort to determine the economic and social viability of it as a sustainable marine tourism activity —and whether in the future the whale and the tourist can coexist or will the latter as with previous human activities such as whaling yet again create a ‘tragedy of the commons’ and displace the former. As an ecotourism product, whale watching holds the potential for sustainable practice, one that is both ecological and profitable. Responsible whale watching is seen as a clean, green industry that simultaneously supports local economies and promotes whale education and conservation. The question is can it live up to these expectations?

scholarly journals Caring for the future can turn tragedy into comedy for long-term collective action under risk of collapse

2020 ◽  
Vol 117 (23) ◽  
pp. 12915-12922 ◽  
Author(s):  
Wolfram Barfuss ◽  
Jonathan F. Donges ◽  
Vítor V. Vasconcelos ◽  
Jürgen Kurths ◽  
Simon A. Levin
Keyword(s):  
Climate Change ◽  
Collective Action ◽  
Experimental Testing ◽  
The Public ◽  
Regime Changes ◽  
The Future ◽  
The Commons ◽  
Future Outcomes ◽  
The Impact

We will need collective action to avoid catastrophic climate change, and this will require valuing the long term as well as the short term. Shortsightedness and uncertainty have hindered progress in resolving this collective action problem and have been recognized as important barriers to cooperation among humans. Here, we propose a coupled social–ecological dilemma to investigate the interdependence of three well-identified components of this cooperation problem: 1) timescales of collapse and recovery in relation to time preferences regarding future outcomes, 2) the magnitude of the impact of collapse, and 3) the number of actors in the collective. We find that, under a sufficiently severe and time-distant collapse, how much the actors care for the future can transform the game from a tragedy of the commons into one of coordination, and even into a comedy of the commons in which cooperation dominates. Conversely, we also find conditions under which even strong concern for the future still does not transform the problem from tragedy to comedy. For a large number of participating actors, we find that the critical collapse impact, at which these game regime changes happen, converges to a fixed value of collapse impact per actor that is independent of the enhancement factor of the public good, which is usually regarded as the driver of the dilemma. Our results not only call for experimental testing but also help explain why polarization in beliefs about human-caused climate change can threaten global cooperation agreements.

scholarly journals Market Sentiment: A Tragedy of the Commons

2011 ◽  
Vol 101 (3) ◽  
pp. 402-405 ◽  
Author(s):  
Tarek A Hassan ◽  
Thomas M Mertens
Keyword(s):  
Tragedy Of The Commons ◽  
Expected Returns ◽  
Market Sentiment ◽  
The Future ◽  
The Commons

We present a model in which investors decide whether or to what degree they want to allow their behavior to be influenced by “market sentiment.” Investors who choose to insulate their decisions from market sentiment earn higher expected returns, but incur a small mental cost. We show that if information is moderately dispersed across investors, even a very small mental cost may result in a significant amount of sentiment in equilibrium: Individuals who choose to be swayed by sentiment increase uncertainty about the future and make it less costly for others to be swayed by sentiment as well.

Antibiotic Resistance is a Tragedy of the Commons That Necessitates Global Cooperation

2015 ◽  
Vol 43 (S3) ◽  
pp. 33-37 ◽  
Author(s):  
Aidan Hollis ◽  
Peter Maybarduk
Keyword(s):  
Antibiotic Resistance ◽  
Selection Pressure ◽  
Tragedy Of The Commons ◽  
Public Access ◽  
Resistant Bacteria ◽  
The Commons

Antibiotic resistance presents a classic example of the “tragedy of the commons.” In this eponymous tragedy, the commons — shared, public access lands — are overgrazed because farmers can send their livestock onto the land at a zero price. The “tragedy” occurs because overgrazing destroys the land and reduces its ability to provide fodder. The application to antibiotics is obvious: the use of antibiotics creates selection pressure leading to increased proportions of resistant bacteria in the patient and the environment. The increase in frequency of resistant organisms diminishes the effectiveness of antibiotics in treating future infections; thus, the long-term value of the antimicrobial resource is reduced.

scholarly journals Triumph of the Commons: Sustainable Community Practices on Rapa Nui (Easter Island)

2021 ◽  
Vol 13 (21) ◽  
pp. 12118
Author(s):  
Robert J. DiNapoli ◽  
Carl P. Lipo ◽  
Terry L. Hunt
Keyword(s):  
Large Scale ◽  
18Th Century ◽  
Tragedy Of The Commons ◽  
Easter Island ◽  
Rapa Nui ◽  
Ecological Changes ◽  
History Of ◽  
The Commons ◽  
Past Land Use

The history of Rapa Nui (Easter Island) has long been framed as a parable for how societies can fail catastrophically due to the selfish actions of individuals and a failure to wisely manage common-pool resources. While originating in the interpretations made by 18th-century visitors to the island, 20th-century scholars recast this narrative as a “tragedy of the commons,” assuming that past populations were unsustainable and selfishly overexploited the limited resources on the island. This narrative, however, is now at odds with a range of archaeological, ethnohistoric, and environmental evidence. Here, we argue that while Rapa Nui did experience large-scale deforestation and ecological changes, these must be contextualized given past land-use practices on the island. We provide a synthesis of this evidence, showing that Rapa Nui populations were sustainable and avoided a tragedy of the commons through a variety of community practices. We discuss this evidence in the context of Elinor Ostrom’s “core design principles” for sustainable communities and argue that Rapa Nui provides a model for long-term sustainability.

Before the Tragedy of the Commons: Early Modern Economic Considerations of the Public Use of Natural Resources

2018 ◽  
Vol 19 (2) ◽  
pp. 409-424
Author(s):  
Nathaniel Wolloch
Keyword(s):  
Early Modern ◽  
Adam Smith ◽  
Tragedy Of The Commons ◽  
Economic Approach ◽  
The Public ◽  
The Commons ◽  
Modern Economic ◽  
Coal Reserves ◽  
Economic Considerations

Abstract This article distinguishes between the precise legal and economic approach to the commons used by Hardin and many other modern commentators, and the broader post-Hardinian concept utilized in environmentally-oriented discussions and aiming to limit the use of the commons for the sake of preservation. Particularly in the latter case, it is claimed, any notion of the tragedy of the commons is distinctly a modern twentieth-century one, and was foreign to the early modern and even nineteenth-century outlooks. This was true of the early modern mercantilists, and also of classical political economists such as Adam Smith and even, surprisingly, Malthus, as well as of Jevons and his neoclassical discussion aimed at maximizing the long-term use of Britain’s coal reserves. One intellectual who did recognize the problematic possibility of leaving some tracts of land in their pristine condition to answer humanity’s need for a spiritual connection with nature was J. S. Mill, but even he regarded this as in essence almost a utopian ideal. The notion of the tragedy of the commons in its broader sense is therefore a distinctly modern one.

"Once? No. Twenty times? Sure!" Repeated decisions and uncertainty in the tragedy of the commons

2014 ◽  
Author(s):  
David J. Hardisty ◽  
Howard Kunreuther ◽  
David H. Krantz ◽  
Poonam Arora
Keyword(s):  
Tragedy Of The Commons ◽  
The Commons

Risk Attitude and Corporate Investment under Output Market Uncertainty: Evidence from The Mekong River Delta, Vietnam

2016 ◽  
pp. 59-70
Author(s):  
Ninh Le Khuong ◽  
Nghiem Le Tan ◽  
Tho Huynh Huu
Keyword(s):  
Negative Relationship ◽  
Risk Attitude ◽  
Business Strategies ◽  
Risk Averse ◽  
Market Uncertainty ◽  
Firm Investment ◽  
Output Market ◽  
The Impact ◽  
The Relationship

This paper aims to detect the impact of firm managers’ risk attitude on the relationship between the degree of output market uncertainty and firm investment. The findings show that there is a negative relationship between these two aspects for risk-averse managers while there is a positive relationship for risk-loving ones, since they have different utility functions. Based on the findings, this paper proposes recommendations for firm managers to take into account when making investment decisions and long-term business strategies as well.

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