I just heard a perfect example of “the tragedy of the commons.” (defined yesterday) In a recent “Curb Your Enthusiasm”, during a dinner party, Larry David observed a friend depleting the caviar on a buffet table. Predictably, he complained to his hostess.
Other examples:
-underproduction in Plymouth Plantation, 1623 when everyone farmed together.
-blue fin tuna depletion (http://dotearth.blogs.nytimes.com/2008/11/26/the-tuna-tragedy-of-the-commons/)
Still more tomorrow…

Negative Externality:
When a “transaction” has a negative impact on an uninvolved party. For example, a polluting factory impacts people who live nearby. A loud music player affects others in the dormitory. Negative externalities are experienced through the tragedy of the commons.