Collective Action Problems and Goods Classification

Vocabulary flashcards covering key terms and concepts on collective action problems, property rights, types of goods, and externalities from the lecture.

Prisoner's Dilemma

A simple collective action problem for two people where the non-cooperative action is a dominant strategy for each player, even though mutual cooperation yields the socially optimal outcome.

Tragedy of the Commons

A collective action problem with many players where individual rational choices lead to the depletion or degradation of a shared, non-excludable resource.

Dominant Strategy

A choice in game theory where a non-cooperative action is preferred by an individual player regardless of what other players choose to do.

Collective Action Problem

A social trap that occurs when a pro-social action $P$ has an individual cost but a collective benefit, resulting in a negative private net benefit ($b < 0$) alongside a positive social net benefit ($B > 0$).

Net Private Benefit

The net benefit (benefits minus costs) of an action experienced strictly by the individual taking that action, denoted as $b$.

Net Social Benefit

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

Externality

The cost (negative externality) or benefit (positive externality) that affects a 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 all others, calculated as the sum of all negative externalities minus all positive externalities.

Rivalrous

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

Non-rivalrous

A characteristic of a good or resource when its use by one person does not diminish the possibility of others using it too.

Excludable

A characteristic of a good or resource if its properties are conducive to controlling or restricting its use.

Non-excludable

A characteristic of a good or resource when it is hard or impractical to stop any given person from using or consuming it.

Private Good

A good that is excludable and rivalrous, making it easy to privatize and sensibly owned by an individual.

Club Good

A good that is non-rivalrous but excludable, making it natural to share among a group while remaining feasible to own.

Pure Public Good

A good that is non-rivalrous and non-excludable, making it free to reproduce or inherently available to everyone.

Common-Pool Resource

A good or resource that is rivalrous but non-excludable, making it vulnerable to overexploitation because it cannot easily be controlled or rationed.

Mutual Coercion Mutually Agreed Upon

Garrett Hardin's proposed social policy concept for solving collective action problems through democratically or collectively agreed-upon legal constraints and enforcement.

Community Institutions (E. Ostrom)

Elinor Ostrom's framework for managing common-pool resources through local community self-governance and rules, as an alternative to state socialism or full privatization.

Free-Rider

An individual who consumes or benefits from a non-excludable good or pro-social action without bearing the private cost of contributing to it.

Positive Feedback

A self-reinforcing dynamic process where an initial change or resource depletion further amplifies the incentive or tendency to exploit the resource.

Negative Feedback

A stabilizing dynamic process that opposes or dampens system changes to maintain equilibrium.