A shared resource — a common pasture, a fishing ground, a company's shared budget, an open-plan office's quiet atmosphere — is available to multiple users. Each user benefits individually from using more of the resource. But the resource is finite.

Individually rational decisions collectively destroy the resource.

Each farmer adds one more cow to the common pasture. Each cow's benefit goes entirely to its owner. The cost of overgrazing is shared by all. So each farmer has an incentive to add more cows — until the pasture is destroyed and everyone loses.

This is the 'Tragedy of the commons' archetype, first described by Garrett Hardin in 1968.

The structure: multiple reinforcing loops (each actor's individual gain) drawing from a shared stock (the common resource) with no effective balancing loop to regulate total use.