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The Rational Expectations Theory is an economic theory that assumes economic agents form expectations about the future by systematically using all available information, without systematic errors. This theory argues that economic decision-makers accurately forecast future economic developments based on past experiences and current data, and that these forecasts are, on average, unbiased. The rational expectations assumption posits that individuals’ forecast errors are randomly distributed and fr

As the human population grows, the Earth and its resources remain constant. When individuals act in their own self-interest regarding resources that are accessible to all but owned by none, and in doing so ultimately deplete those resources, a collapse occurs. This phenomenon is known as the "Tragedy of the Commons." Origin of the Term This economic theory was first introduced in 1833 by the British economist William Forster Lloyd, who criticized the degradation of common pastures. Later, in the