An application of this principle can be seen in the Compact Disc Minimum Advertised Price Antitrust Litigation Settlement currently being flogged in newspapers and on the Net.
The more consumers filing claims in this settlement, the lower the recovery to each. Each additional person signing up produces a marginally worse deal for those who went before him. If enough people sign up, all the money will be subject to cy pres distribution, which in less technical terms means nobody gets nuthin'. I note, by the way, that although I think of cy pres as a reasonably obscure legal term, a google search of the term got me 2,510 hits. Replevin weighs in at a corking 10,900 hits, but I like to think that's because of my blog.
In any event, the problem is allied to the logical dilemma sometimes described as the tragedy of the commons. A commons is any resource used as though it belongs to all (the classical illustration is sheep grazing a meadow and breeding until they all starve), and a commons is destroyed by uncontrolled use. If you believe in the tragedy of the commons you are less likely to believe in the Invisible Hand of Adam Smith. And vice, of course, versa.
Another way to look at the dwindling CD settlement is to view it as a multiplayer Prisoner's Dilemma, one of my favorite facets of game theory. From the point of view of the person sitting at the computer screen pondering whether to apply for a refund, however, the choice is between having a chance at some free money or having no chance at all (if s/he doesn't apply). Because this is not an iterated game, there was only one logical course of action. At least that was my experience.
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