The mental model of the tragedy of the commons can often be confusing. The history of the term itself comes from something that most of us don't see much any more: cows grazing in the common areas of town (I don't know about most of you, but there aren't many cows in Arlington, VA!). I keep this term straight in my head by focusing on the tragedy part of the phrase. The tragedy is that a resource is being overused. The reason for the resource overuse is that people using it get the benefits, but don't face all (or any) of the costs. Because no one person owns the resource, everyone uses it for all it's worth.
I have always found it easier to understand this by examples:
- Dirty dishes at a frat house;
- Gross team locker rooms; or
- Filthy public bathrooms.
To understand this model, I have to identify the resource that is tragically overused, who gets the benefits, what are the costs, and where is the ownership not working. In an organizational setting these could be some examples:
- An employee having more work than she can handle:
- Resource: a good employee's efforts
- Ownership Breakdown: multiple bosses
- Benefits: work output
- Costs: partial salary being charged to different departments or from a general fund
- A customer not getting enough attention (phone calls being ignored, etc):
- Resource: customer's goodwill or potential business for a company
- Ownership breakdown: a sales team owns the relationship, but no one person is responsible for relationship
- Benefit: company or team gets credit for future sales
- Cost: Salespeople can't spend time with customers they will get individual credit for
- Copier keeps breaking down:
- Resource: Copier
- Ownership breakdown: copier paid for from some general fund, no team/employee responsible for it
- Benefits: copies are essentially free
- Costs: too much copying results in machine breaking down well before it might otherwise
You can see that in each example, there isn't an individual owner. The result is that within the organization, no one views the resource as being "theirs." What incentive do folks have in each of these scenarios to take the long-term view and cultivate the resource? Also, given that the person/entity who gets the benefits doesn't face the costs (or the other way around) you can see how even the most principled person would have trouble overcoming the incentives.
So, tragedy of the commons is the result of self-interested individuals reacting to the incentives of a situation. I think wherever a resource is being overused in the organization, walking through the four concepts above may help you to determine if a tragedy of the commons is happening.
The collective action model represents deliberate choices by multiple individuals, usually it means they are agreeing to something. Sometimes collective action helps avoid the tragedy of the commons. I think collective action can work when you have groups that are small or can enforce the collective action:
- A team agrees to take turns bringing in donuts on Friday;
- An organization decides to donate time to fix up the building; or
- A couple decides to stop eating junk food.
These are all things where folks agree to a goal or action and have a way to enforce it. This isn't always the case with collective action. I'm sure we've all been in situations where someone "free rides" off of collective action.
Does anyone have another way of viewing these topics? Were my examples satisfying (or even right)? How do you see these models manifesting in the firm?
Thanks to David who suggested the topic!
Oh. I guess i misunderstand Collective Action....
What is the term for everyone wanting to do something but not be the first?
The most common example is an empty dance floor...
Tragedy of the Collective?
Posted by: David McGinnis | 06 October 2010 at 11:08 AM
Hmm, I can't think of what that might be. You actually reminded me of a psychology class I took where we discussed that if someone is in physical danger, the bigger the crowd, the less likely people are to step up.
Do any other readers know the term for what David is talking about?
Posted by: Ann Zerkle | 06 October 2010 at 01:06 PM
You might be referring to the "free-rider" problem, which is associated with goods and services that have externalities - pos or neg - which may be difficult appropriate (e.g. water, air, view of a skyline, open-air concerts, pollution, etc.).
Think of Public Radio fund drives - you get to listen to the music on the radio, but they cannot easily identify you as a listener, so they cannot send you a bill and depend on your volunteering to send in a pledge.
What's interesting is how they attempt to overcome this problem - with collection action strategies, like providing tee-shirts and coffee mugs to those who pledge so they can display proudly their membership and promote a need for others to signal membership in the group, making you feel bad, appealing to your sense of honor or community... and other strategies as well - like offering unique collateral content you can't get anywhere else - a book signed by an author donated to the drive, special recordings of oft-watched programs, or discounts on other stuff...
Cheers,
Ben
Posted by: Ben | 07 October 2010 at 09:21 AM
Hmm. i'm not sure we're talking about the same thing. I totally agree with your definition of a free-rider, but I don't think it explains the empty dance floor:
There are 30 guys and 30 girls and every one of them wants to dance, but they are all too afraid that they are the only one who wants to. They are willing to get out there and ask a girl to dance as long as someone else goes first.
is it kindof like group think? silent majority? I guess it's most like game theory (is that the general term for the prisoner's dilemma?)
all questions, no answers. Story of my life.
Posted by: David McGinnis | 08 October 2010 at 11:19 AM
The phenomenon you are referring to is known as the "bystander effect" or "diffusion of responsibility."
An often-cited example of this phenomenon is the murder of Kitty Genovese. http://en.wikipedia.org/wiki/Murder_of_Kitty_Genovese Kitty Genovese was murdered outside her apartment in Queens, New York, in 1964. Several dozen of her neighbors witnessed the attack, but failed to come to her aid or call 911.
I recall that Malcolm Gladwell wrote insightfully about this incident in "The Tipping Point," though I don't recall his insights.
Posted by: Peter | 12 October 2010 at 02:15 PM