Economics on the beach II: the tragedy of the commons

There are things you want to do only with lots of other people. Go see a football game, for instance, or a pop concert. You would feel rather silly being the only one clapping and cheering. You might also prefer not to be the only couple in a restaurant. Aside from the growing feeling that you are probably in the wrong place, you miss the background chatter, the gentle clashing of dishes, the constant moving around of busy waiters. You would miss atmosphere.

But the beach, for me at least, could do with fewer people.

In fact, I would almost go as far as saying that I would prefer to be the only person on a beach, except family and friends of course. To be fair the Cornish beaches that I have been on in the last couple of weeks are typically not too crowded, and if there weren’t a significant number of beach goers, the beach wouldn’t have a café and bathrooms. And I do appreciate being able to buy an ice-cream cone now and then.

But there is also a beach not far from the others that we essentially never go to. In the last almost ten summers, in which I have spent parts of the summer in Cornwall, I have been to this beach only once. And this is actually probably the nicest beach of all. It has islands and caves and multiple bays. The tide does interesting things to the beach. It has lovely walks around the cliffs. It is simply amazing. But it is just always full of people. Being there once, I realized that I much prefer to go to a less attractive beach with fewer people over the more attractive beach with lots of people.

I expect that I am not the only person on the beach wishing others away and that beaches generally suffer from what is known as “the tragedy of the commons”. Beaches in Cornwall are “commons” – see also my post on a conflict over access to stream water on a Cornish beach. They are not owned by any individual or group but are owned by all. By the way, I am very happy about this. I remember once being at a conference at Stony Brook, New York, where I spent a free late afternoon driving around to find some access to the coast. As a naïve European I thought I could just drive around and find a sign pointing me to a beach somewhere. In fact I drove around for hours without ever getting close to the coast at all. I always ran into private property, or at least signs indicating as much. And I suppose that if I had found a publicly accessible beach it would have been packed. So I do appreciate the fact (I believe) that in most of Europe (including the UK) most beaches are “commons”.

But the problem with commons, or at least a possible problem, is that they are overused, just as is supposedly the case with the overfishing of international waters and, historically, with the overgrazing of the commonly owned village meadow.

The problem is this. When a new person arrives on the beach, while this person is apparently – by a revealed preference argument – deriving some positive benefit from being on the beach, the well-being of the people already on the beach often deteriorates. The typical Cornish beach is wind-swept and prone to the occasional shower. People, therefore, bring wind-breakers and even tents to the beach. Imagine your joy when a family of four tents puts up camp a few yards from your feet right between you and your view of the sea. Or when you go bodyboarding in the surf, trying to stay within the very narrow bounds allowed to you by the life-guards, you continuously bump into all those other surfers or, worse, they into you.

If this problem is severe, one could imagine welfare improving prices that people have to pay for going to the beach. Note that through parking fees such prices are actually sometimes already in place. It is indeed possible in some cases – even if it sounds a bit paradoxically – that charging a perhaps even substantial price for beach access would be welfare improving for all potential beach goers. The reader may want to try and construct a model (a set of assumptions and a logical argument) in which this statement is true. I will do this in my next blog post.

I would like to finish this post by pointing out that this “tragedy of the commons” is probably present in many other situations. The last time I went to the Natural History Museum in London with my kids, it was so packed with people that we did not really enjoy ourselves much and left again pretty quickly. When I was in Kyoto (on a two-month sabbatical) we mostly avoided visiting the “top temples” because they were so busy that we felt the whole point of visiting a calm and serene temple garden was lost. Yes, all these places do charge entry prices, but I am not convinced that these prices are welfare-optimizing for the “consumers” of these places. Generally, any place you visit with potentially lots of other people with which you compete over access rights in some form or another – a children’s play ground, an amusement park, a museum, etc. – potentially suffers from a bit of “the tragedy of the commons”.

 

 

 

 

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6 thoughts on “Economics on the beach II: the tragedy of the commons

  1. The real puzzle here is why the government who (I suppose) owns the beaches, doesn’t auction them off or at least leases them for a limited amount of time (a few years or so) to private beach developers. The equilibrium price for which the government could sell a beach should be roughly equal to the present value of the current and future consumer surplus beach-goers derive from using it net of the costs of keeping the beach clean and safe. That must be a handsome amount of money – which you could give to the poor who might no longer go to the beach because they can’t afford the entry fees a private owner may charge. Private beach owners may or may not charge entry fees – they might want to let people in for free but rent out beach chairs and such for a fee, or set up a café charging prices above marginal costs. In any case, selling the beaches should be a clear efficiency gain.

  2. I am not sure selling beaches would be such a great idea. Just one worry i would have with this is that all beaches are then bought by the same company, call it the “Cornish Beach Company” who could then essentially charge monopoly prices (to some extent). And I am not sure that monopoly prices would so happen to coincide with welfare maximizing prices.

    Or suppose that all beaches are owned independently privately, then the near perfect competition between these beaches would lead to very low prices. This sounds good, but does nothing to solve the externality problem that beach goers impose on each other.

    • Well, that would depend on economies of scale in running a beach, whether the costs per square meter of keeping the beach nice and safe decrease substantially with the size of the beach. I sort of doubt it. I think running a beach is no more subject to economies of scale than running hotels, and monopolization doesn’t seem to be much of an issue there. Also, one should not forget that monopoly does not per se imply inefficiency. A monopoly with perfect price discrimination is efficient. In the beach case: charge an entry fee (equal to total consumer rent) and rent out sun umbrellas and beach chairs at marginal cost.

  3. two things: first, neither perfect degree price discrimination nor perfectly competitive beaches would solve the underlying externality problem i described. i actually believe that in the present case, because of the externalities beach goers impose on other beach goers, monopoly prices could well be more efficient than competitive prices. but it would be a curious coincidence if they were truly welfare optimal.

    second, suppose you consider bidding for a series of beaches. as far as i can see, your value for one beach would increase with the number of other beaches you own, as the more beaches you own in the vicinity the higher you could make prices as fewer other beaches are competing with you.

  4. Pingback: Economics on the beach III: towards discussing welfare optimal pricing – first steps in building a model | Graz Economics Blog

  5. Pingback: Economics on the beach IV: welfare optimal pricing – a model | Graz Economics Blog

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