Individually reasonable actions can produce collectively harmful equilibria under identifiable incentive, information, trust, and enforcement conditions.

An actor can choose reasonably given its local information, incentives, expectations, and available enforcement while the interaction of similarly reasonable choices leaves the group in a persistently worse state. Mechanisms include unpriced spillovers, free riding, coordination failure, mistrust, information asymmetry, and rewards that favor local performance over shared consequences. The claim is conditional: it does not say individual rationality is generally harmful, that every undesirable outcome is an equilibrium, or that a claimed collective objective is legitimate. Application requires naming the actors, payoff or constraint structure, information available to each, enforcement conditions, and a feasible comparison. For LivingIP, it motivates examining system-level consequences and strategic incentives rather than assuming that competent participants, good intentions, or open contribution will compose into a good collective outcome.