PHIL 440A.  HANDOUT ON 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.  Two-Person Collective Action Problems (Simultaneous 2-Person Prisoners' Dilemma)

COLUMN CHOOSER

 C D ROW        CHOOSER C 2,2 4,1 D 1,4 3,3

2-PERSON PRISONERS' DILEMMA (from Gauthier, p. 102).

(Lower numbers represent higher ranked (more preferred) outcomes.)

III.  N-Person Collective Action Problem (N-Person Prisoners' Dilemma)

Everyone else

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

An N-Person Collective Action Problem Involving

A Decision to Cooperate (C) or Defect (D).

FREERIDING.  In an N-Person 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.

IV.  Sequential 2-Person Prisoners' Dilemma

3,3

C

C

D

1, 4

4,1

C

D

Player #1                                                  Player #2                     D

2,2