Definition
The tragedy of the commons occurs when individuals overuse a shared, open-access resource because each person receives private benefits from use while the costs of depletion are spread across everyone.
Why It Matters
It explains why markets may fail to protect common resources and why rules, property rights, or regulation may be needed to prevent depletion.
Example
Overfishing can happen when no one owns the fishery and each fisher has incentive to catch as much as possible.