A Collective Action Problem occurs when a group of individuals would benefit by cooperating, but each individual has an incentive to act selfishly, leading to a suboptimal outcome for the group as a whole.
- Individual vs. collective interest: There’s a conflict between what’s best for the individual and what’s best for the group.
- Free-riding: Individuals may try to benefit from the group’s efforts without contributing.
- Coordination challenges: Organizing and motivating a group to act collectively can be difficult.
Examples:
- Environmental issues: Climate change, pollution, and resource depletion.
- Public goods: Funding public services like education, healthcare, and infrastructure.
- Traffic congestion: Individuals choosing to drive alone rather than using public transportation.
Understanding collective action problems is crucial for addressing social and environmental challenges.