The combination of two tragedies: commons and anticommons tragedies

Abstract

Under a general constant elasticity of substitution (CES) function, this paper generalizes the substitution of concurrent possession of a property right—from perfect substitutes to partial substitutes to perfect complements—in the context of commons/anticommons tragedies. We demonstrate that when the possibility of substitution between property rights is relatively low, inefficiency arises in the underusage of a common resource (i.e. anticommons tragedy). When the possibility of substitution between property rights is relatively high, inefficiency arises in the overusage of a common resource (i.e. commons tragedy). When the possibility of substitution between property rights is moderate, the two tragedies (commons and anticommons) are combined and may achieve efficient usage of a common resource, which is the notion of two negatives making a positive.