THE STRATEGICALLY RATIONAL FAILURES OF COLLECTIVE ACTION
The provision of public goods and the tragedy of the commons tend to be grouped together for the same treatment; however, they are theoretically distinct. In a public goods exercise, individuals are asked to contribute a certain amount in exchange for receiving a benefit that exceeds the cost of participation.
Individuals will tend to contribute less than the amount that would be most efficient for every individual to share in the highest possible net benefit versus net cost. In the tragedy of the commons, each actor incurs a cost on the environment distributed across all actors to receive a personal benefit. The cost is amplified as each actor makes the same ultimate choice and, as in the Prisoner’s Dilemma, ends up achieving suboptimal net individual gain because of it. In each case, failure results from the overall inability of individuals to achieve an efficient collective outcome because each has the ever-present interest to contribute less or not at all.Garrett Hardin provided the initial rational choice treatment of the tragedy of the commons in his 1968 article “The Tragedy of the Commons” in Science.[533] Although Hardin scarcely touches on game theory, he still introduces its significance for analyzing collective actions problems. His main focus is the problem of overpopulation and the Earth’s carrying capacity for human civilization. He concludes that the only solution that can adequately address the burgeoning human population is to introduce laws with sanctions for overbreeding. Hardin’s solution is “mutual coercion mutually agreed upon,” anticipating the neoliberal belief in the necessity of coercive force to achieve cooperation.13 Hardin likewise specifies the necessity of a single metric for value and defers to the interpersonally transferable treatment of utility consistent with game theory.[534] [535] [536] [537] [538]
Researchers following Garrett Hardin interpreted the tragedy of the commons with respect to overgrazing, overpopulation, and the over discharge of greenhouse gases into the atmosphere as a multi-actor Prisoner’s Dilemma game.15 According to Hardin’s original paper,
As a rational being, each herdsman seeks to maximize his gain.
Explicitly or implicitly, more or less consciously, he asks, “What is the utility to me of adding one more animal to my herd?” This utility has one negative and one positive component.(1) The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1.
(2) The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of -1.16
Rational choice theorists regard this situation as a standard Prisoner’s Dilemma with many actors.17 The ostensibly self-evident reliance on tangible, interper- sonally transferable rewards automatically results in the applicability of the PD model, which excludes the possibility that actors have resources to work together to achieve common goals.
table 9. Tragedy of the Commons Modeled as Prisoner's Dilemma
In Hardin’s scenario, each individual faces a choice of whether to add an animal to his herd or to maintain the status quo. Each individual has a direct benefit from adding an animal. Each individual bears only a fraction of the cost of increasing his herd size. Therefore, regardless of what the other agent or agents decide to do, each actor is always better off seeking gain. The accompanying PD matrix captures this theoretical structure, with numbers designating ratio of output yield against cost.[539] [540] [541] [542] [543] [544] [545] [546]
Of course, in the two-person example, the commons is occupied by two parties who make independent choices that result in a suboptimal outcome, assuming that every individual is strategically rational.[547] Such a situation satisfies the two definitive features of the PD.
First, “it is collectively rational to cooperate: each agent prefers the outcome produced by everyone cooperating over the outcome produced by no one cooperating.” Second, “it is individually rational not to cooperate: when each individual has the power to decide whether or not she will cooperate, each person (rationally) prefers not to cooperate, whatever the others do.”20 Thus, again, the Prisoner’s Dilemma game lies at the foundation of neoliberal political economy and provides the rationale for the governance that must be introduced to ensure mutually beneficial conduct. Modelers’ reliance on interpersonally transferable utility and game theory’s restriction to outcomes and standard assertion of individualistic maximization lock individuals, whether in two-person or multi-actor contexts, into the unrelenting Prisoner’s Dilemma bind of mutual indigence: one model fits all sizes of interdependent action situations.The tragedy of the commons is therefore seen as an extension of a two-person Prisoner’s Dilemma in which each agent has the incentive to overload a common resource for personal gain. A common-pool resource is naturally available for exploitation, so it is difficult to restrict individuals from contributing to the overuse that results in the globally experienced suboptimal yield. In a public goods problem, on the other hand, agents must be coerced to contribute to a joint effort for a common source of value to be created. Nevertheless, the exercise of providing a public good can be compared to the tragedy of the commons scenario by focusing on the costs rather than the benefits to an individual for contributing to the collective enterprise.
Thomas Schelling discusses how a two-person Prisoner’s Dilemma can be used as the basis for an extended analysis of how numerous individuals may confront an interdependent reward scheme. Everyone would benefit if all cooperated. However, each individual has the incentive to defect in the hope of benefiting either from others’ restraint from overusing a common-pool resource or from others’ contributions to a public good.
As a result, all individuals achieve a suboptimal outcome compared to what they would have achieved if all had cooperated. According to Schelling,The influence of one individual’s choice on the other’s payoff we can call the externality. Then the effect of his own choice on his own payoff can in parallel be called the internality. We then describe prisoner’s dilemma as the situation in which each person has a uniform (dominant) internality and a uniform (dominant) externality, the intern- ality and the externality are opposed rather than coincident, and the externality outweighs the internality.[548]
Schelling uses the term “internality” to refer to an actor’s personal gain from acting and “externality” to refer to an actor’s cost to other actors as a consequence of her or his action.[549] In the collective action problem under discussion, the uniformity that Schelling identifies is in the benefit to the individual from defecting and the cost incurred by others by an actor’s defection. From the perspective of strategic rationality, each actor’s impact on others, or causal effluvium, is superfluous to individual choice. Every individual has the incentive to defect because the direct benefit outweighs the personally experienced cost of failing to cooperate. Costs and benefits are treated as interpersonally transferable utility. No additional considerations weigh on individuals’ choices; reflections of the merit of processes, meta-preferences over whether an individual would prefer to live in a mutually cooperative society or in a society of individual maximizers, and reasoning as a member of a team are ruled out without examination.
Using this analysis of costs and benefits, which in public goods problems presumes “the same binary choice and same payoffs” for each individual, the provision of public goods and tragedy of the commons can both be modeled using the PD game.23 In the two-person case, the direct benefit to the individual from defecting is the net gain from free riding on others’ efforts (i.e., the difference between cooperating and defecting, holding all other actors’ choices the same) plus the gain of avoiding the cost of contributing.
In the collective action problem encompassing two or more actors, every individual will bear the costs of his defection, but this cost will be distributed among participants. The gain from action is individual; the cost of the action is shared by all members of the group. The tragedy of the commons then provides the opportunity to test a central thesis of Prisoners of Reason: either both the tragedy of the commons and the chronic under-provision of public goods are unique instances of neoliberal subjectivity manifested through enacting Prisoner’s Dilemma logic, or these problems have been characteristic of human society throughout its history and are now receiving rigorous investigation through the value-neutral tools of rational choice.