Understanding Collective Action: Matching Behavior

Abstract

This paper develops an approach to understanding voluntary collective action. A simple model illustrating this approach predicts Pareto optimal provision of a nonexcludable public good in the case of identical actors with perfect information, regardless of the number of actors. In this approach, actors voluntarily subsidize each other's contributions to the provision of a public good. Each actor individually finds it optimal to match other actors' contributions dollar for dollar, and this matching behavior leads to a Pareto optimal outcome from the viewpoint of the group as a whole. The approach developed here differs from two other sets of proposed solutions to the free-rider problem. One set of proposed which may be called solutions, simply assert that individuals are forced to contribute toward the provision of collective goods, once desired quantities of such goods are known (for example, Mancur Olson; Gary Becker's theory of collusion; Theodore Groves and John Ledyard). These however, beg the question of how the coercion itself is financed, since the policing of collective agreements is itself a public good: noncontributors cannot be excluded from benefiting from the public good resulting from the coercion. Other proposed solutions of the problem of voluntary collective action assume some special property of the public good. Olson's by-product solution assumes that the public good can be jointly produced with a private good, and that the private good cannot be produced as cheaply without also producing the public good. George Stigler's asymmetry solution, as a second example, assumes that individuals have differing interests regarding the exact form that the public good will take, leading them to contribute so that the good that is provided is optimal from their own individual viewpoints. Both of these solutions implicitly introduce some form of private-ness into the public good whose provision they try to explain. This paper avoids limiting assumptions of special characteristics of public goods, and also does not postulate any coercion in the provision of the public good. After a description of the model, some examples of the predicted matching behavior and experimental evidence are briefly discussed.

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