Title: Collective action theory - Wikipedia
Headings: Collective action theory
Collective action theory
Contents
Basic theory of groups
Purpose of organizations
Public goods
Traditional theory
Casual theory
Formal theory
Olson's theory of collective action
Difficulty of collective action
Collective good provision
Group size
Incentives for collective action
Relevance for interorganizational systems
Notes
References

Content: Olson's theory explores the market failures where individual consumer rationality and firms' profit-seeking do not lead to efficient provision of the public goods, i. e. where another level of provision would provide a higher gain at lower expenses. The basic problem consists of the fact that within the scope of Olson's model individuals, acting economically rational, do not have an interest in contributing to the provision of a public good. This is even the case if they themselves are able to utilize the good after it has been obtained. Collective good provision
First of all some general remarks are made here concerning the provision of a good. The costs rise with an increasing output of public goods as well as of private goods. Moreover, there are fixed costs, this means that the first produced unit is the most expensive one. Furthermore, the difficulties in coordination and the transaction costs rise with the group size. Ergo, the average costs feature a U-shaped course. Lastly, every single individual's share of the overall profit depends on the quantity of individuals and on the individual utilization. In the context of collective action the focus is on the provision of a collective good.