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Institutional Structure and the Logic of Ongoing Collective Action

Institutional Structure and the Logic of Ongoing Collective Action

By Jonathan Bendor, Dilip Mookherjee
1987Working Paper No. 845

Work by Axelrod, Hardin, and Taylor indicates that problems of repeated collective action may lessen if people use decentralized strategies of reciprocity to induce mutual cooperation. Hobbes' centralized solution may thus be overrated. We investigate these issues by representing ongoing collective action as an n-person repeated prisoner's dilemma. The results, summarized by 9 propositions, show that (1) decentralized conditional cooperation can ease iterated collective action dilemmas -- if all players perfectly monitor the relation between individual choices and group payoffs. Once monitoring uncertainty is introduced, (2) such strategies degrade rapidly in value; (3) centrally administered selective incentives become relatively more valuable, though freeriding may occur; (4) a nested structure, with reciprocity used in subunits and selective incentives centrally administered, combines the advantages of the decentralized and centralized solutions: more stable than the former, often securing more cooperation than the latter. Generally, the model shows that the logic of repeated collective action bears significant implications for the institutional forms of organizations seeking collective benefits.