Individual solutions to shared problems create a modern tragedy of the commons.

Abstract

Alone and together, climatic changes, population growth, and economic scarcity create shared problems that can be tackled effectively through cooperation and coordination. Perhaps because cooperation is fragile and easily breaks down, societies also provide individual solutions to shared problems, such as privatized healthcare or retirement planning. But how does the availability of individual solutions affect free-riding and the efficient creation of public goods? We confronted groups of individuals with a shared problem that could be solved either individually or collectively. Across different cost-benefit ratios of individually versus collectively solving the shared problem, individuals display a remarkable tendency toward group-independent, individual solutions. This "individualism" leads to inefficient resource allocations and coordination failure. Introducing peer punishment further results in wasteful punishment feuds between "individualists" and "collectivists." In the presence of individual solutions to shared problems, groups struggle to balance self-reliance and collective efficiency, leading to a "modern tragedy of the commons."