CC–PP game
The Commonize Costs–Privatize Profits Game (or CC–PP Game) is a concept developed by the
The CC–PP Game originally appeared in Hardin's book titled Filters against Folly: How To Survive Despite Economists, Ecologists, and the Merely Eloquent which was published in 1986.[1]
Players of the CC–PP Game aim to
Hardin related the CC–PP Game to
Tragedy of the Commons and the CC–PP Game
The CC–PP Game is used to explain how individuals utilize
Hardin uses the original conception of the commons as a "village pasture used for grazing sheep or cattle in
In a more modern example of the CC–PP Game, Hardin attributes the desertification of the Sahel desert to "unmanaged access and overuse."[1]
John D. Aram summarized the tragedy of the commons and the CC–PP Game stating, "Tragic macro effects result from a structure of micro incentives that allows unmanaged access to a fixed resource."[5]
Game Theory and the CC–PP Game
The CC–PP Game is an example of a non-cooperative equilibrium or
The CC–PP Game refers to the market for a scarce natural resource, for example groundwater. Groundwater is scarce because it can be extracted from the ground at a much higher rate than it can be replenished naturally.[4] In addition, clean groundwater in many areas is limited. Groundwater is a natural resource that can be difficult to assign property rights to and is needed by all individuals.
Private firms as well as everyday consumers will extract groundwater for their own use. Private firms gain profits from using the water to produce a good or directly selling the water. Individual consumers gain utility or satisfaction from drinking the water or using it in their homes. Both the private firm and the individual have an incentive to take water from the ground and receive a gain in utility from taking that water (privatized profits).[4] The water supply is diminished, resulting in a tragedy of the commons and a loss of utility for everyone that uses the groundwater (communized costs).[4] Since an individual user does not have to pay for the cost of water depletion, but is still gaining the utility or profit from using the water, the individual will continue to use the water. Every individual will come to this same conclusion and the natural resource will be depleted.[5]
This can be seen in a
Real Life Examples
Fisheries
Fisheries are a prime example of the CC–PP Game. Companies gain a profit for every fish that they catch and are incentivized to continue catching fish. However, their overfishing depletes the amount of fish in the ocean, hurting the environment and other individuals. All individuals pay for the cost of a decrease in the amount of fish.
Mining
Intangible Assets
Hardin also included "intangible assets" such as “worker safety, stabilizing the cost of healthcare, and economic efficiency" as instances of tragedy of the commons.[5] These assets can also deteriorate if individuals choose to privatize benefits and communize costs.
Policy Applications
Hardin proposed several solutions to the CC–PP Game in his books and essays.
In Hardin's early works, he expressed his belief that they only way to protect natural resources was by limiting individual's freedoms.[5] He stated that preserving the commons would only be possible by “mutual coercion, mutually agreed upon.”[5] Today, this would be considered command and control regulation. Hardin believed that individuals needed regulation or systems in place to force them to stop depleting resources. He rejected the option of people volunteering to not ruin common goods because of individual's lack of will power and lack of incentives to limit themselves. He believed that voluntary self-restraint was not a solution to avoiding the tragedy of the commons.[5]
However, later in his career, Hardin argued that a strict individual responsibility could preserve the commons.[5] He described systems of accountability for policy makers in order to preserve the commons for their constituents. This puts the responsibility for preserving the commons onto the political system.[5]
Ideally Hardin wanted all costs and benefits to be privatized.[5] John D. Aram argues that Hardin would be in favor of a flat tax structure and elimination of public subsidies.[5]
See also
References
- ^ ISBN 0-670-80410-X
- OCLC 26586955.
- ^ .
- ^ ProQuest 210948824.
External links
- Who benefits, who pays?, an extract from Filters Against Folly