Collective action problems
Jim wants to be able to see as he walks along at night so he contributes to the cost and upkeep of streetlights. Mike also wants to have lit streets. Mike, however, recognises that if other people, like Jim, pay for street lights he can benefit from this without having to contribute because street lights are a public good; street lights are non-excludable and non-rival. Mike therefore does not contribute, but is able to enjoy well lit streets as others have paid for this public good. If everyone acted as Mike, no one would contribute to the public good. If people can benefit from a public good without paying for it, why would they pay for it? But if no one contributes, there will be no funding for public goods. This is what we call the public goods problem.
Questions: what is the main page we should have (all else can redirect to it). Options:
- Collective action problem(s)
- Public goods problem
- Free rider problem
- Prisoners dilemma
Existing content to merge / integrate:
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