In 1833, British economist William Forster Lloyd presented a setting in which selfish individual economic behavior might lead to collapse. He posited the scenario of a plot of land held in common by a set of farmers on which each could graze his or her cows. If each farmer grazes as many cows as possible following self-interest, the grass would deplete and the "commons" would have no value at all. This same phenomenon could apply to fishing, hunting, aquifer use, and so on. That in turn suggests the need for governmental regulatory regimes involving licensing and the like.
To see how to avoid such a value and environmental collapse without resorting to legal sanctions, let's start with two partners, Bob and Alice, who own a common piece of land in equal shares. Based on historical records, they determine the land can support a total of 100 grazing cows.
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