What Is a Common Resource?
A common resource is a resource, such as water or pasture, that provides users with tangible benefits. A major concern with common resources is overuse, especially when there are poor social-management systems in place to protect the core resource.
Common resources that are not owned by anyone are called open-access resources.
Common Resource Explained
Overuse of common resources often leads to economic problems, such as the tragedy of the commons, where user self-interest leads to the destruction of the resource in the long term, to the disadvantage of everyone.
History for Context
A little history can provide us some context. Although technically created by Garrett Hardin, 'the tragedy of the commons,' originated with Adam Smith, who many credit as the father of economics. Smith's seminal work focused on the interplay of individuals and private economic agents exploiting scarce and rival common resources (environmental) for their own rational, self-interested purposes, leading to over-production and, ultimately, the possibility of an irreversible depletion of limited resources.
The root of this dilemma stems from insufficient and poorly protected property rights, which in the 18th-century were ill-defined and impossible to enforce (by today's standards). As the theory goes, because consumers do not own common goods, they have little incentive to preserve or multiply them. Rather, there is an incentive to extract maximum personal utility or benefit while you still can.
An obvious and poignant implication yet today are cracks in capitalist systems. To Smith's dismay, his 'invisible hand' doesn't always reach for self-interested, rational actions to socially optimal outcomes, rather, as illustrated by the tragedy of the commons, market failures and the inefficient allocation of scarce resources is an unfortunate reality.