Schelling's Game Theory: How to Make Decisions

By Robert V. Dodge | Go to book overview

CHAPTER 16
The Commons and Fair Division

Cooperation and coordination are related to what Schelling calls the social contract. Society consists of institutional arrangements to overcome divergences between perceived individual interest and some larger collective bargain. In the Prisoner’s Dilemma individual self-interest is the natural choice at the expense of the common good. The social contract makes a bargain work where society benefits. The social contract may be achieved through experience of cooperation or coordination, but problems can exist when not everyone gains. He gave an example of defiance of the social contract, where responsibility to the group is secondary. In Schelling’s example drivers are returning to Boston from Cape Cod on a Sunday afternoon. Traffic is creeping along, slowed by a mattress on the road that has fallen off the top of a vehicle. Hundreds of cars slowly inch ahead until reaching the mattress, wait for a break in oncoming traffic, swerve around the mattress and resume normal speed. If anyone bothered to move the mattress, the traffic problem would be resolved. But here self-interest wins the day, as nobody can remove the mattress until he has passed it and nobody gains anything by moving the mattress after having passed it.1

This situation resembles a well-known model that involves congestion and selfinterest, and offers an explanation of situations where not everyone gains when self-interest is the motivation.


The Commons

Garrett Hardin’s insight into the competition between public welfare and individual motives first appeared in his essay, “The Tragedy of the Commons.”2 The commons his title referred to is common land that existed in English villages and also New England. Common land was village property available for unrestricted use by both the villagers and their animals. What Hardin observed was that as more animals were put on the common land to graze, it became congested and there was less grass available for each animal, so the animals produced less milk and meat. However, as long as there was any profit to be made by grazing one’s animals on the common, the villagers would be encouraged to do so. That was true even if individuals realized that the total amount of meat or

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