by David P Myatt.
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An entry in the second edition of the New Palgrave Dictionary of Economics, edited by Steve Durlauf and Larry Blume.
Abstract: Mancur Olson’s logic of collective action predicts that public-good provision is most likely to fail when the size of the consumer group is large; his public goods are partially rival, and so the private cost of provision is relatively high. With a pure public good, this logic no longer applies, and so attention turns to producer groups. When provision involves teamwork (so that the collective action succeeds when everyone works together) then coordination problems arise. Modern techniques suggest that `good’ equilibria in which provision is successful are robust only when the costs of provision fall below private rather than social benefits.
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