Common Pool

AAA

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.

INVESTOPEDIA EXPLAINS '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. Public Good

    A product that one individual can consume without reducing its ...
  2. Tragedy Of The Commons

    An economic problem in which every individual tries to reap the ...
  3. Common Resource

    A resource, such as water or pasture, that provides users with ...
  4. Blind Pool

    A limited partnership or stock offering with no stated investment ...
  5. Mortgage Pool

    A group of mortgages held in trust as collateral for the issuance ...
  6. Free Rider Problem

    1. In economics, the free rider problem refers to a situation ...
Related Articles
  1. Personal Finance

    5 Economic Concepts Consumers Need To Know

    A solid understanding of economics helps build a strong foundation in almost every area of life.
  2. Fundamental Analysis

    The Difference Between Finance And Economics

    Learn the differences between these closely related disciplines and how they inform and influence each other.
  3. Options & Futures

    Game Theory: Beyond The Basics

    Take your game theory knowledge to the next level by learning about simultaneous games and the Nash Equilibrium.
  4. Fundamental Analysis

    The Basics Of Game Theory

    Break down and examine the potential consequences of economic/financial scenarios.
  5. Professionals

    Master Limited Partnership (MLP)

    A master limited partnership, also referred to as an MLP, is a publicly traded partnership, where the limited partnership interests are traded much like shares in a corporation.
  6. Professionals

    Human Resource Planning

    Just as companies must plan ahead to ensure a steady supply of raw materials, machinery and office space, they must also plan ahead to maintain a steady supply of quality employees. Human resource ...
  7. Professionals

    Value Proposition

    A value proposition is a company’s promise to its customers of a unique and relevant benefit. The value proposition is often the heart of a company’s advertising campaigns.
  8. Fundamental Analysis

    Work In Progress (WIP)

    Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.
  9. Fundamental Analysis

    Capital Budgeting

    Capital budgeting is a planning process used by companies to evaluate which large projects to invest in, and how to finance them. It is sometimes called “investment appraisal.”
  10. Professionals

    Porter's Five Forces

    Porter’s Five Forces is an analysis scheme created by Harvard Business School professor Michael E. Porter. Using this analysis tool, business managers can gauge the level of competition within ...

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center