Collective action in the commons: A theoretical framework for empirical research

Rajiv Sethi () and E. Somanathan

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: A model of collective action in the commons that is intended to provide a framework for empirical research into the question of when cooperation is likely to be successful is presented. It is based on the presence of costly punishment opportunities, some players who have a taste for punishing those who violate agreements to cooperate (an assumption strongly supported by recent experimental research), and bounded rationality. It predicts that cooperation is more likely when communication is cheap, the technology of public good provision is sufficiently productive, effective punishment opportunities are available at sufficiently low cost, and when group size is large (holding constant the other parameters mentioned). Heterogeneity in the ability to inflict punishment or be hurt by it may result in collective action becoming infeasible, especially when there are increasing returns to the public good, but there is a range of parameters in which changes in heterogeneity will have no effect and circumstances in which heterogeneity will actually favor cooperation.

Pages: 21 pages
Date: 2004-06
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