THE TRAGEDY OF THE ANTI-COMMONS IN THE LONG RUN IN A COMMON-RESOURCE ECONOMY*

Abstract

We examine the tragedy of the anti-commons in the long run that is defined as the total output being insufficient from the welfare viewpoint. We develop a common-resource model with a vertical structure: an upstream owners' market and a downstream users' market. We compare two situations: a long-run market and a second-best scenario. We find the following: (i) the number of users is insufficient (excessive) when the demand parameter is large (small); and (ii) the tragedy of the anti-commons in the long-run occurs (does not occur) when the demand parameter is large (small).