PHIL 240A. HANDOUT #8. COLLECTIVE ACTION PROBLEMS

I. Terminology

1. INDIVIDUALISTICALLY RATIONAL (IR) = to Maximize One's Expected Return (Total Expected Benefits Less Total Expected Costs). This sense of rationality is the twentieth-century development of the concept of INSTRUMENTAL RATIONALITY. It is the notion of rationality that is employed in economics. (Note that to be INDIVIDUALISTICALLY RATIONAL does not require that one be an egoist.)

2. COLLECTIVE ACTION PROBLEM = A situation in which everyone (in a given group) has a choice between two alternatives and where, if everyone involved chooses the alternative act that is Individualistically Rational (IR), the outcome will be worse for everyone involved, in their own estimation, than it would be if they were all to choose the other alternative (i.e., than it would be if they were all to choose the alternative that is not IR).

By convention, in any Collective Action Problem, the IR alternative is referred to as "Defection" ("D"); and the non-IR alternative is referred to as "Cooperation" ("C").

II. Matrix Representation Of One Sort of Collective Action Problem

Everyone else

	Cooperates (C)	Defects (D)
I Cooperate (C)	+100, +100	-101, -99.9
I Defect (D)	+101, +99.9	-100, -100

A Collective Action Problem Involving A Decision to Cooperate (C) or Defect (D).

(In the example discussed in class, D = Pollute and C = Don't Pollute.)

FREERIDING. In a Collective Action Problem in which most agents choose to Cooperate, Defectors are referred to as FREERIDERS, because they benefit from the Cooperation of others, but are unwilling to reciprocate Cooperation.

III. A Principle of Reasonable Cooperation

REASONABLE (in Rawls's sense) = being willing to Cooperate on fair terms of social cooperation.

In a Collective Action Problem, a REASONABLE person will Cooperate if enough others will Cooperate also. In a Collective Action Problem, a REASONABLE person would not choose to FREERIDE on the Cooperation of others, even if s/he could get away with it. A REASONABLE person is willing to do his/her fair share in a cooperative arrangement.

TALBOTT'S UNIVERSALIZABILITY TEST

In a Collective Action Problem, where you have no other information about the other agents:

(1) Consider only the outcomes in which everyone does the same thing;

(2) Define Cooperation as the alternative that would produce the best outcome (in everyone's estimation) from among the outcomes in which everyone does the same thing;

(3) Choose to Cooperate, if you have reason to believe that enough others (e.g., most others) are also willing to Cooperate.