Common Pool

DEFINITION of 'Common Pool'

A resource or asset that is jointly managed or accessed by a group rather than by an individual. Something that is considered to be part of a common pool is exploited by a group as a whole, but with the benefit passing to the individual and the cost spreading across the group. An asset considered to be common pool can be public, such as a river or forest, or private, such as money raised by a group to purchase an investment.

BREAKING DOWN 'Common Pool'

Assets and resources considered to be part of a common pool present a complicated problem. Members of the group benefit from the resource individually but bear costs collectively. A common pool resource, such as a river, may be used both to cool a manufacturing plant and by cities for drinking water. Both the manufacturing plant and the city benefits from the river jointly, but if the plant dumps pollution into the river it cannot be used by the city for drinking water. Common pool items are typically regulated in order to reduce the possibility of a tragedy of the commons situation.

RELATED TERMS
  1. Commodity Pool

    A private investment structure that combines investor contributions ...
  2. Whole Pool

    In the mortgage-backed securities market, whole pools refer to ...
  3. Group Depreciation

    A method of calculating depreciation by amalgamating assets into ...
  4. Multinational Pooling

    A method global companies use to manage the risk of their employee ...
  5. Option Pool

    Shares of stock reserved for employees of a private company. ...
  6. MBS Pool Number

    A number or alphanumeric character assigned to a mortgage-backed ...
Related Articles
  1. Personal Finance

    Swimming Pools: Costs Vs. Long-Term Value

    Consider the costs of installing and maintaining a swimming pool, and compare this with the pool's utility and the market value it adds to your home.
  2. Markets

    Should You Wade Into The Dark Pools Of Liquidity?

    Dark pools of liquidity allow big investors to trade away from the public eye. They limit market impact but may leave small investors in the cold.
  3. ETFs & Mutual Funds

    Pooled Funds Minimize Risk and Reward

    Pooled funds combine money from many individuals to invest in vehicles like a mutual fund or a pension fund.
  4. ETFs & Mutual Funds

    Net Asset Value

    Discover how mutual fund companies and ETFs price shares of their investment pools.
  5. Investing

    An Introduction To Dark Pools

    Dark pools are private exchanges for trading large chunks of securities that are not accessible to the public.
  6. Markets

    Understanding Tragedy of the Commons

    The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource.
  7. ETFs & Mutual Funds

    Natural Resource Investing

    ETFs and futures are just some of the various investment options available to natural resource investors.
  8. Investing

    Barclays, Cr. Suisse: Highest Dark Pool Fines Ever

    Barclays Capital Inc. and Credit Suisse Securities (USA) LLC will be paying over $150 million combined for the settlement of cases related to alleged violations of securities laws while operating ...
  9. Personal Finance

    Budget-Stretching Gardening Tips

    A bakers dozen of easy, budget-stretching garden ideas just in time for spring and summer planting.
  10. Investing

    What does Joint Venture Mean?

    In a typical joint venture, two or more businesses agree to contribute capital and resources for a common project. Most often, that project produces something that earns revenue.
RELATED FAQS
  1. Is it possible to invest as a group?

    I am a newbie so this may seem like a very basic question to most. Is there any law or regulation that would prevent a group ... Read Answer >>
  2. What are the primary advantages of forming a joint venture?

    Learn how the advantages of entering into a joint venture make the business strategy an alternative to mergers and acquisitions ... Read Answer >>
  3. What are the primary disadvantages of forming a joint venture?

    Learn the disadvantages to forming and maintaining a joint venture partnership, including factors business owners should ... Read Answer >>
  4. Can anyone own common stock in a company?

    Understand who can purchase common stock as well as the key characteristics that differentiate common stock from preferred ... Read Answer >>
  5. What is the difference between the equity method and the proportional consolidation ...

    Discover the differences between the equity method and the proportional consolidation method of joint venture accounting, ... Read Answer >>
  6. How does horizontal integration allow companies to share resources?

    Learn how horizontal integrations allows companies to share resources. Understand specific examples of horizontal integrations ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center