Inefficiency and common property regimes

Much of the literature on the commons focuses on the fact that many agents are assigned usage rights simultaneously, but less attention has been paid to the exercise of exclusion rights. The simultaneous exercise of one of the two rights by all the owners of a common causes a problem of overexploitation in the first case (competition “in use”) and underuse in the second (competition “in exclusion”). The relevance of both inefficiencies stems from the way they illustrate the general conflict between individual and collective interests. This paper proposes a formal synthesis of the problems of inefficiency associated with the exploitation of resources in common property regimes. The synthesis takes into account the following features: i) the importance of the consumer surplus for the analysis of the issue; ii) the attitude of economic agents in the face of a reciprocal externality linked to the exploitation of the common; and iii) the social and the private costs of exploitation.