Ensuring that common goods and open-access resources—everything from clean air and the global climate to the internet and civil security—are equitably and fairly available to everyone requires incentive mechanisms.
This is also true for living resources with shared ownership, such as stocks of fish and game. In a limited world, common goods and open-access resources that are used without incentives promoting cooperation often suffer from over-exploitation and may collapse through a “tragedy of the commons.” Incentives to prevent these problems can emerge bottom-up, through interactions of and agreements among stakeholders, or be imposed top-down by governing agencies. Social institutions and individual agents thus often use negative incentives (rewards) and positive incentives (penalties) to promote cooperation. Since providing incentives tends to be costly, models are required to identify policies for their effective and efficient use. Several models are available as tools for this purpose.
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