Collective action problem

What is a Collective Action Problem?

A collective action problem occurs when individually attractive choices make it difficult to achieve a shared outcome. Free riding on others’ contributions is one form. The problem can reduce cooperation without making cooperation impossible.

Examples and distinctions

• The public goods game studies voluntary contributions to a shared benefit.

• The prisoner’s dilemma illustrates a particular conflict between individual incentives and mutual benefit.

• A common-pool resource, such as a shared pasture, also involves the possibility that one person’s use leaves less for others. Each herder may benefit from adding another animal while the extra grazing burden is shared. That is the familiar tragedy-of-the-commons problem, although a tragedy is not inevitable.

Evidence on institutions

Ostrom’s review (2010) draws on field and experimental research showing that outcomes depend on institutions, communication, trust, and the resource setting. Communities can sometimes organize effective management; neither inevitable collapse nor one universal institutional solution follows from the existence of a collective action problem.

Applying the Idea

For a specific problem, identify who benefits, who bears costs, what information is available, and which rules shape contribution. Climate policy raises collective-action questions because the benefits and costs of emissions reductions cross national borders. That does not mean a country can never benefit from acting alone. Compare the actual rules and incentives.