Collective Action Problems and Goods Classification

Vocabulary flashcards covering collective action problems, the prisoner's dilemma, externalities, tragedy of the commons, and the economic taxonomy of goods based on excludability and rivalrousness.

Collective Action Problem

A situation (also known as a social trap, social dilemma, or generalized prisoner's dilemma) where a pro-social action has a negative private net benefit ($b < 0$) but a positive net social benefit ($B > 0$), making defection individually rational even though all individuals are better off if everyone cooperates.

Dominant Strategy

In game theory, an action that yields a higher payoff for an individual player regardless of the strategies or choices selected by other players.

Tragedy of the Commons

A collective action problem involving many players where individual incentives to extract or pollute an open-access shared resource lead to its overuse, degradation, or depletion.

Mutual Coercion Mutually Agreed Upon

Garrett Hardin's proposed institutional solution to the tragedy of the commons, wherein a society collectively consents to legal restraints, sanctions, or regulations to enforce cooperative behavior.

Community Institutions (E. Ostrom)

Elinor Ostrom's framework demonstrating that local user groups can successfully manage and sustain common-pool resources without central state control or privatization through collective self-governance rules.

Externality

A cost (negative externality) or benefit (positive externality) that affects a third party who did not choose to incur that cost or benefit.

Net Social Cost

The sum of an individual's own net cost plus all net costs to others, calculated as the sum of all negative externalities minus all positive externalities.

Net Social Benefit

The overall societal net value of an action, defined formally as $-1 \times \text{net social cost}$, representing the sum of benefits to the individual and to all others minus costs.

Rivalrous

The formal property of a good or resource if it cannot be fully used or enjoyed by more than one person at once.

Non-rivalrous

The property of a good where its consumption or use by one person does not diminish the possibility of others using it too.

Excludable

The property of a good whose characteristics and properties are conducive to controlling, restricting, or preventing its use.

Non-excludable

The property of a good where it is difficult or impractical to stop any given person from accessing, consuming, or using it.

Private Goods

Goods that are both excludable and rivalrous (such as food, clothing, toys, furniture, and cars), making them naturally suited for private ownership.

Common-Pool Resources

Goods that are rivalrous but non-excludable (such as fish stocks, hunting game, and water or air used as dumping grounds), making them difficult to ration or conserve.

Club Goods

Goods that are excludable but non-rivalrous (such as cable television), allowing them to be shared efficiently among members while controlling access.

Pure Public Goods

Goods that are both non-rivalrous and non-excludable (such as national defense, free-to-air television, climate stability, music, and knowledge), remaining accessible to all without diminishing in availability.

The Commons (Sinks and Sources)

A major class of collective action problems encompassing shared ecological resources functioning as 'sources' for harvest (e.g., fisheries, forests) or as 'sinks' for waste disposal (e.g., atmosphere, waterways).