Farmer decisions shape land-use systems, with consequences for a landscape's economy, ecology, and the well-being of its inhabitants. These decisions are central in the management of natural resources as they may contribute to the tragedy of the commons, or ways to avoid it. Farmer decisions have been explained by several concepts and theories, including sociodemographic factors, expected utility theory, prospect theory, bounded rationality, and the theory of planned behavior as variations on goal-oriented (instrumental) decision-making. This review provides an analysis of each theory, in comparison with Kemper's theory on status, power, and reference groups as a primarily social relation lens through which to understand decision-making. Combining relational and instrumental perspectives on decision-making may be key to understanding the emergence of collective action and avoidance of tragedy of the commons.