This note is a part of my Zettelkasten. What is below might not be complete or accurate. It is also likely to change often.
First introduced by Garrett Hardin in 1968, where he proposed a situation where there are two herders sharing a common pasture. The common pasture suffers when any herder's cattle overgrazes. Each herder is motivated to add more sheep since fallout from overgrazing is shared amongst all (and is delayed). Therein lies the tragedy of the Commons.
The tragedy of the commons is that in a finite world, if each individual pursues his own best interests by extracting maximum value from a common resource or Public Good, result is that the common resource gets overexploited.
In essence, this is almost the opposite of the Allocation Efficiency problem where the property is owned by an individual who is not making maximum use of it.
Expressed in different aphorisms:
Also called Collective Action Problems