Symmetric Tragedies: Commons and Anticommons

An anticommons problem arises when there exist multiple rights to exclude. In a lengthy law review paper, Michael A. Heller has examined "The Tragedy of the Anticommons," especially in regard to disappointing experiences with efforts to shift from socialist to market institutions in Russia. In an early footnote, Heller suggests that a formal economic model of the anticommons has not been developed. This paper responds to Heller's challenge. We analyze the anticommons problem in which resources are inefficiently underutilized rather than overutilized, as in the familiar commons setting. The two problems are shown to be symmetrical in several respects. We present an algebraic and geometric illustration and extend the discussion to several applications. Of greater importance, we suggest that the construction is helpful in understanding the sources of major value wastage in modem regulatory bureaucracy. The navigation of the Danube is of very little use to the different states of Bavaria, Austria, and Hungary, in comparison of what it would be if any of them possessed the whole of its course till it falls into the Black Sea. (ADAM SMITH, The Wealth of Nations (1776), bk. 1, ch. 3)