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So how would you take into consideration over-fishing? Having constantly increasing production would be good for a while until it is not. There would have to be
by daemin 10y ago
So how would you take into consideration over-fishing? Having constantly increasing production would be good for a while until it is not. There would have to be some sort of artificial limit set, either by the fishermen themselves (which would be a cartel and well, frowned upon), or by another authority on the island (which in that case would be regulation).
Outside of that there would be an ever increase in fishing, until a crash in fish numbers. Though perhaps this could be the cause of the crash in the story, an absence of fish unraveled the whole economy.
- wu-ikkyu 10y agoOver supply happens because we don't have a reliable measurement of demand to base our production on. Demand has traditionally been extremely poorly estimated with slow, out of sync, paper-based processes. Now that information can be relayed instantaneously. Perhaps a smart demand system which measures current and future demands for fish based on information input directly (P2P) from the end-user to the supply network, using some sort of utility model (which would factor in diminishing returns per user), could keep demand and supply in better balance.
- Iv 10y agoThe post I answered to assumed that only two entities existed in the island: financial actors and fishermen and explores what it means for the economy when we apply the basic assumptions of free-market : individual agents planning for short-term gains. I worked within those bounds, I am actually a pretty strong advocate of sane regulation of free-market, partly because I agree with the GP: free-markets unchecked lead to some insane financial cons. And also to the tragedy of the commons that you explain.