The divergence between individual and collective rationality can be overcome through communal arrangements for sustainable management. The Hardin model is incomplete because it neglects this potential for collective action in the commons. IAD is an abstract framework that has been used to organize a large body of empirical research on common-pool resource management. The Actors IAD uses a fallible learner model of the individual. The capacity of an individual to learn is shaped by the opportunities, and incentives, created by the institutional setting.
Individuals are capable of designing, or redesigning, institutions to better achieve learning.
The individual is still viewed as a rational actor, in the sense that he is attempting to advance his material well-being, but he has the capacity for enlightenment. That is, he can understand the potential for collective tragedy, and he can form cooperative arrangements to avoid that tragedy. The basic IAD design principles for sustainable commons management are listed below. Clearly defined boundaries for the pool of appropriators and resource domain. Collective choice arrangements that allow appropriators to participate in setting rules.