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I came across this word/concept when reading a philosophical book but I cannot remember where. It basically means if only a few people do something its ok, but if everyone does it it becomes bad for everyone.

For example a good fishing hole. If only I or a few others go there, everyone benefits. If everyone goes then there are no fish and everyone loses.

The word has a meaning to do with reaching some tipping point. If a few are firemen, that's great, but if everyone was a fireman that's bad as nothing else will get done.

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driving [a car] –  wim Sep 20 '13 at 21:10
    
Do we have any economists on E.SE? Surely there's an economic term relating to the optimal allocation of resources which applies here. –  Jon of All Trades Sep 20 '13 at 23:12
    
It sounds like you are discussing the categorical imperative of Immanuel Kant, part of which states "Act only according to that maxim whereby you can at the same time will that it should become a universal law without contradiction." –  bib Sep 21 '13 at 18:55
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@JonofAllTrades, I'm not an economist, but I have heard of an economic term that is very related to this question: Pareto efficiency. I'm not familiar enough with this term to know if it's what the OP was looking for, but it's definitely at least a related concept. –  Ben Lee Oct 2 '13 at 18:06

6 Answers 6

I think you mean "the tragedy of the commons". From Wikipedia:

[T]he tragedy of the commons is the depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to the group's long-term best interests.

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I don't think that's quite right. The element of depletion is central to TotC, but the OP's question centers on "good if rare/bad if common". –  Jon of All Trades Sep 20 '13 at 23:11

In game theory, there're numerous games that fit OP's description well including those in Talia Ford's and benshepherd's answers. But, in essence, it's just a multiple-player version of prisoner's dilemma.

Another celebrated(and discredited) example that fits equally well is the paradox of thrift. Suppose that an unfavorable shock hits the economy. An individual will be better off by saving more and spending less unilaterally, provided all others don't adapt their spending behaviour. However, if everyone save more in unison( and they have incentive to do so), everyone will be worse off compared to the utility level that they don't.

As far as I know, in Paul Samuelson's Economics(10ed), paradox of thrift is chosen as a notorious example of fallacy of composition. Thus maybe fallacy of composition is the word you are after.

If you are looking for a single word, I guess it could be emergence, though I'm not absolutely sure.

Added: This is an attempt to show why prisoner's dilemma is significant in the philosophical ground. At sometime in our life, in one form or another, we heard of some maxims with a philosophical flavor, say, "People are better off when making their own choices"(Milton Friedman), "The road to economic meltdown is always and everywhere paved by governments' good intentions"(Austrian School), "That government is best which governs not at all", "People pursuing their self-interest are guided by the invisible hand" These dogmas, or widespread misuses of them, though inherently appealing for us, freemen, are debunked by the simple equilibrium analysis of prisoner's dilemma. The lesson is that it's an oversimplication to believe that individual incentive always coincides with social incentive.

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I think the phrase "Prisoner's Dilemma" should be made more obvious here, it alone could be the answer. –  Luke Hoffmann Sep 27 '13 at 0:23

Are you certain it was a one-word adjective? I can't think of any adjectives, but in game theory, there are names of some "games" that the philosopher in question might have used, such as stag hunt.

Also, in economics, such situations are addressed, whether more or less directly, by the notions of high opportunity cost, high marginal cost, diminishing returns etc.

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This reminds me of the "January Effect". From Investopedia:

A general increase in stock prices during the month of January. This rally is generally attributed to an increase in buying, which follows the drop in price that typically happens in December when investors, seeking to create tax losses to offset capital gains, prompt a sell-off.

Investors exploited this trend in the mid 1900s, but once the general public heard of the January Effect and tried to exploit it themselves by holding their stocks into the new year, the effect was rendered useless.

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Perhaps the word you are looking for is "saturated."

If a market is saturated, it would be unwise to start a business in that area. If water was saturated with sugar, it would be pointless to add more sugar.

The definition does not imply good or bad connotations but it may be the right word to use in context.

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I think the concept is the Fallacy of Composition :)

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Please give further explanation –  Matt Эллен Sep 19 at 8:21

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