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| title | chunk | source | category | tags | date_saved | instance |
|---|---|---|---|---|---|---|
| Collective action | 2/4 | https://en.wikipedia.org/wiki/Collective_action | reference | science, encyclopedia | 2026-05-05T07:13:09.558887+00:00 | kb-cron |
The term collective action problem describes the situation in which multiple individuals would all benefit from a certain action, but has an associated cost making it implausible that any individual can or will undertake and solve it alone. The ideal solution is then to undertake this as a collective action, the cost of which is shared. Situations like this include the prisoner's dilemma, a collective action problem in which no communication is allowed, the free rider problem, and the tragedy of the commons, also known as the problem with open access. An allegorical metaphor often used to describe the problem is "belling the cat". Solutions to collective action problems include mutually binding agreements, government regulation, privatisation, and assurance contracts, also known as crowdacting.
=== Exploitation of the great by the small === Mancur Olson made the claim that individual rational choice leads to situations where individuals with more resources will carry a higher burden in the provision of the public good than poorer ones. Poorer individuals will usually have little choice but to opt for the free rider strategy, i.e., they will attempt to benefit from the public good without contributing to its provision. This may also encourage the under-production (inefficient production) of the public good.
=== Institutional design === While public goods are often provided by governments, this is not always the case. Various institutional designs have been studied with the aim of reducing the collaborative failure. The best design for a given situation depends on the production costs, the utility function, and the collaborative effects, amongst other things. Here are only some examples:
==== Joint products ==== A joint-product model analyzes the collaborative effect of joining a private good to a public good. For example, a tax deduction (private good) can be tied to a donation to a charity (public good). It can be shown that the provision of the public good increases when tied to the private good, as long as the private good is provided by a monopoly (otherwise the private good would be provided by competitors without the link to the public good).
==== Clubs ==== Some institutional design, e.g., intellectual property rights, can introduce an exclusion mechanism and turn a pure public good into an impure public good artificially. If the costs of the exclusion mechanism are not higher than the gain from the collaboration, clubs can emerge. James M. Buchanan showed in his seminal paper that clubs can be an efficient alternative to government interventions. A nation can be seen as a club whose members are its citizens. Government would then be the manager of this club.
==== Federated structure ==== In some cases, theory shows that collaboration emerges spontaneously in smaller groups rather than in large ones (see e.g. Dunbar's number). This explains why labor unions or charities often have a federated structure.