Free-Rider Problem and Sovereignty Protection

Hitoshi Matsushima

No CIRJE-F-1185, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This study investigates free-rider problems in long-term relationships, where each player seeks loopholes to impose the burden of cooperation on other players. The players establish a committee that demands that each player select an action as promised by a preset commitment rule, contingent on all players' pre-play announcements. We require the committee to protect player sovereignty in that no player is forced to carry out high cooperation levels against their will or receive future retaliation from the other players for their low commitment. We demonstrate a method called the cautious commitment rule, according to which the committee makes each player a promise that is not necessarily the same as, but always close to and not greater than, their announced upper limit. We show that by adopting this rule, the committee can solve the free-rider problem while adhering to sovereignty protection and rule sustainability. As an application, we investigate global warming and show that adopting the cautious commitment rule is crucial for solving the tragedy of the global commons that all countries in the world have long faced.

Pages: 35 pages
Date: 2022-01
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http://www.cirje.e.u-tokyo.ac.jp/research/dp/2022/2022cf1185.pdf (application/pdf)

Related works:
Working Paper: FREE-RIDER PROBLEM AND SOVEREIGNTY PROTECTION (2022)
Working Paper: Free-Rider Problem and Sovereignty Protection (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2022cf1185

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