Common Resource

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Dictionary of Economics

Course (113 videos)

Common Resource

What is a common resource?

A common resource is any good or service that is nonexcludable and rival.

To illustrate this concept, we use the example of fishing for tuna in the ocean. No one can be legally excluded from fishing in non-territorial waters, and tuna are also rival -- meaning that for every tuna you catch, there is one fewer tuna for someone else to catch.

Overuse of a common resource often leads to a tragedy of the commons.

What are some other examples of common resources? Watch to find out!

For more, see MRU’s microeconomics course section on public goods and tragedy of the commons.

Teacher Resources

Transcript

What is a "common resource"? A common resource is any good or service that is nonexcludable and rival.

 

Let's look at tuna in the ocean as an example of a common resource. The tuna are nonexcludable because there are no property rights to fish in the ocean. No one can legally be prevented, or excluded, from fishing for tuna outside of a nation's territorial waters. Tuna are also rival. Every tuna you catch means one fewer tuna for someone else to catch.

 

Other examples of common resources are the environment and public roads. These nonexcludable and rival resources often lead to a tragedy of the commons, the destruction of that common resource. In the case of tuna, that means the collapse of the fishing stock.

 

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