The tragedy of the commons, and higher rush-hour fares on the Kolkata Metro

The tragedy of the commons. A common resource is rival in use, since what one person uses is no longer available to others, but not excludable, since no one can easily be kept from using it. The tragedy of the commons is the result: because users cannot be kept out, a common resource is used beyond its efficient level, and it may be run down until all its users are worse off.

Why it happens. Each user weighs her own gain from using a little more against her own cost. Every unit she uses also leaves less for the others, but that loss falls on them, not on her, so she ignores it. The harm each user does to the rest is a negative externality, and it is the source of the tragedy. Since every user reasons the same way, total use is far above what would be best for the group. One remedy is to define property rights over the resource, so that an owner who can exclude others bears the full cost of over-use.

An example: groundwater in a farming village. Our own example. Twenty farmers in a Punjab village draw water from the same underground aquifer through their own tubewells. Water one farmer pumps cannot be pumped by another (rival), and none can stop the others from pumping (not excludable). Each pumps as much as suits his own crop, since water he leaves will simply be pumped by a neighbour. The water table falls every year, wells must be dug deeper at a growing cost, and in time every farmer has less water than if all had pumped less.

Why the Metro would charge more in rush hours.

• Off-peak, a seat is nearly non-rival. Outside the rush hours a Metro train has room to spare, so one more passenger takes almost nothing from anyone else. A road is similar: it can be treated as a public good while it is uncongested.
• In the rush hours the train becomes rival. Once a road is congested, one more user slows everyone else, and the road becomes rival. A packed Metro coach at 9 a.m. is the same: each extra passenger takes standing room others could use, slows boarding at stations and adds to everyone's discomfort.
• The Metro is not itself a common resource, but at one flat fare its rush hours share the commons problem. The Metro is excludable: the ticket gate keeps out anyone who has not paid. What a single fare leaves out is the crowding. Each passenger decides when to travel by comparing her own benefit with the fare, and she ignores the crowding she adds for others. That unpriced harm to other users is the same negative externality that drives the tragedy of the commons. So, at a single fare, too many people travel in the peak hours and too few at other times.
• A higher peak fare makes riders pay for the crowding. A charge for use is one way out of the commons problem. The Metro needs no new way of keeping people out, since its fare already does that; it only has to vary the fare by the hour. The extra fare makes each passenger count part of the cost she imposes on others.
• Price then rations scarce peak capacity. Prices guide buyers in using scarce resources where they matter most. Passengers whose trips can be moved, such as shoppers, students with later classes or retired people, shift to off-peak trains, since demand responds more to price when consumption can be put off. Office-goers who must arrive on time still travel at the peak and pay more. Crowding falls, the peak trains carry those who value the timing most, and the trains that ran half-empty at midday are used more fully.

Conclusion. The tragedy of the commons is the over-use of a resource that is rival but not excludable, because each user ignores the loss her use causes others. A Metro train is excludable, so it is not a common resource, but at one fare its rush-hour crowding is the same kind of unpriced externality, so Kolkata Metro would charge higher rush-hour fares to make passengers pay for the crowding they cause and to spread travel more evenly over the day.