I have come across the ‘tragedy of commons’ while learning
about the Public Goods. Last night, standing in the queue at the ATM, I
witnessed something which made me thought about ‘Tragedy of Commons’.
There were
about 20 people in the ATM queue, few were informing others, few were walking
towards it and it was anticipated that many more will flock in soon. The
machine was dispensing only ₹ 2000 notes. There was a guard inside in ATM who
was insisting that a person should use a single ATM card when he is in front of
the ATM. As he reasoned with few customers, such restriction will allow more
people to withdraw cash. Initially, customers agreed to this reasoning and made
only one withdrawal. But soon, a customer argued that how can this guard
enforce such restriction and he (customer) is not aware of any such rule
enforced from the government or the Bank who operates this ATM. Because of the
rule pointing argument and more than that, sensing the not in favor balance of
power due to complimentary intimidation (जानता नही है तू मै कौन हूं substitutes),
guard backed down. Soon, most of the customers (with more than one card) were
using more than one card by simply discarding the guard request, with smile or
neglect or our all-time favorite उन्हे तो नही रोका.
Those who
have ATM cards (debit or credit) can use them at ATM till the point they
exhaust their withdrawal limit. So we can think of ATM like a pasture where you
cannot exclude any person with cattle, yet any person’s cattle grazing (here
withdrawal) reduces availability for others (cash in this case).
In the
particularly constrained period of currency replacement, we witness long queues
in from of ATMs. Young guys petrol during night to see which ATMs are working
and which have smallest queues.
Now in
the incidence that I witnessed I am assuming that more number of people having
smaller cash from the ATM is better than having fewer number of people cash up
to their limit of withdrawal. Why can I say that? A typical assumption is
diminishing marginal utility of cash. The another one, a person with more than
one ATM cards is more likely to be acquainted with cash-less modes of
transaction.
The
incidence I observed bears similarity with ‘tragedy of commons’ since optimal
cash that any customer should withdraw from all customers waiting in the queue
(social) is less than optimal cash from the individual customer point of
view.
Apart from
this some sort of nice Economics in action sort of example, (which I could
think since I had to stand only for 15 minutes in the queue and ATM kept
functioning till my card reached there!), it also puts some light about
implications of individual behavior about moral set-ups of those individuals
and especially when social optimal and individual optimal are putting contrary
pressures. I keep wondering why someone would like to act completely in selfish
interest (one which generates more materialistic returns of one) than
altruistic even when one was made aware of the consequences. Are our
considerations for others are true only in limited circle, like family or close
friends? Or they are true only in situations of abundance and will shift to
more selfish, ‘rational fool’ mode in situation of scarcity?
On similar
note, I wonder (though more or less based on hearsay and FB posts) how many
higher income individuals (A) asked un-banked or not-so-bank friendly
individuals in their circle (not family members and friends) to exchange their
obsolete cash with them (with A) which
they (A) can exchange/utilize with relative ease and can pass though these days
by substituting to cashless mode.
I know many
people must have extended credit, helped in kind or even taught others to use
cashless mode of payments. But I think very few must have offered like please
take half of these exchanged notes since it is difficult for you to exchange,
while relatively easy for me. I know many senior citizens with card using sons
and daughters stood in line to exchange-deposit-withdraw to help their family,
even when they themselves weren’t in dire need of cash and their absence from
queue could have reduced time and increased availability for more deserving
individuals. (I do not object to their exercise of their free will and rights.
I am simply pointing out a possible better scenario in the absence of their
actions. In fact, it is quite possible that in last 7 days of currency
replacement phase, many individuals with more serious transaction need of
currency have been deprived while many individuals who had less transaction
need but more insurance need of currency have gotten new currency notes.) We
also might have heard about individuals who paid their maids and servants in
invalid denominations. So, we have many examples of selfish or self-interest behavior.
But how many made an ultimate altruistic offer which most likely to be
accepted?