Sustainability is possible despite greed - Exploring the nexus between profitability and sustainability in common pool resource systems (original) (raw)

The sustainable use of common pool resources has become a significant global challenge. It is now widely accepted that specific mechanisms such as community-based management strategies, institutional responses such as resource privatization, information availability and emergent social norms can be used to constrain individual 'harvesting' to socially optimal levels. However, there is a paucity of research focused specifically on aligning profitability and sustainability goals. In this paper, an integrated mathematical model of a common pool resource game is developed to explore the nexus between the underlying costs and benefits of harvesting decisions and the sustainable level of a shared, dynamic resource. We derive optimal harvesting efforts analytically and then use numerical simulations to show that individuals in a group can learn to make harvesting decisions that lead to the globally optimal levels. Individual agents make their decision based on signals received and a trade-off between economic and ecological sustainability. When the balance is weighted towards profitability, acceptable economic and social outcomes emerge. However, if individual agents are solely driven by profit, the shared resource is depleted in the long run-sustainability is possible despite some greed, but too much will lead to over-exploitation. The sustainable use of environmental, social and technical resources has become a significant global challenge 1, 2. Resource misuse, such as over-fishing 3-5 or deforestation 6-8 can potentially result in supply problems and lead to both economic and ecological damage. When the harvesting (or use of) a shared social-economic resource diminishes the value of the resource for other users (negative externality), and it is difficult to control access to the resource in the absence of well-defined property rights (non-excludability), the resource is typically referred to as a common pool resource (CPR) 9-12. CPR systems are characterized by a social dilemma-the tragedy of the commons 13-15. That is, the goal of an independently-acting individual is to maximize their use of the resource (gain higher portions of the harvest). However, if all individuals restrained their use of the resource, contrary to their selfish motivations, it should be possible to maintain the resource at a sustainable level, benefiting the population as a whole. An individual's selfish motivations to reap bigger profits manifest in the implicit assumption that investing more effort into harvesting will gain a larger proportion of the harvest and thus a higher profit, however, this proportional gains assumption is never expressed explicitly 16, 17. There is a large body of literature describing the management and governance of CPR systems. Perhaps most famous is the pioneering work of Elinor Ostrom 9, 15, 18 , who identified the benefits of managing the commons de-centrally and documented design principles for stable resource management. This work led to substantial related research in the field 19-22 , in laboratory settings 23-26 , as well as via simulation experiments 17, 27-30. Consequently, a number of external factors have been signalled as acting as drivers for cooperation in the commons, including: communication between individuals 21, 31-33 ; punishment of defectors 26, 34-37 ; reward 38-40 ; trust 14, 41, 42 ; social norms 22, 35, 43 ; and explicit consideration of the future 25, 44, 45 .