Group Size and Group Behaviour

Group Size and Group Behaviour

M. Olson

Chapter 2 of The Logic of Collective Action: Public Goods and the Theory of Groups

A Summary 

In a Nutshell

It is not in the interests of rational members of large groups to contribute toward achieving the common interest so long as the group members are free to pursue their own individual interests. This is because when the number of members of a group is sufficiently large such that the typical participant knows that his own efforts will not make any difference to the outcome and he will be affected by the outcome in much the same way whether he makes any contributions or not. Put another way, as the cost of one individual’s defection is shared by the whole group, the individual himself pays very little, but the benefits from defection are the same as though he had contributed. Therefore it is rational for the individual to defect, or shirk, from the agreed plan of action of the group.

Being in a small or “privileged” group is much more advantageous. Collective action is possible because the incentives affecting each member dictate that each individual has an interest in acting such that the group does not fail. The incentives that face the group are the same that face individuals, whereas for large groups this is not the case.

This conclusion holds even if the supposed outcomes of large group action would provide large benefits to the members. Additionally, the argument is formulated on the assumption that there is perfect consensus, thus in the real world where no such consensus exists, collective action problems of free-riding are exacerbated by argument over initial goals.

Social incentives can incentivize group members to act in the interests of the group. This can be social position pressure, threat of exclusion. These are called “selective incentives” that can be mobilized to animate a latent group. The nature of the incentives is that they can distinguish between individuals. However, generally such social sanctions can only function in smaller groups. This is because in larger groups it is not rational to exclude someone whose actions by definition had no effect on the outcome of the group, and secondly because the large group will not be a friendship group meaning the defector is unlikely to be socially affected if he fails to make the sacrifices on the group’s behalf.

The argument is not affected by claims that people act selflessly. This is because even a perfectly selfless individual will not think it rational to undertake action where his own contribution will be utterly imperceptible. “A man who tried to hold back a flood with a pail would probably be considered more of a crank than a saint, even by those he was trying to help”.

[Implications

People are rational, but individually rational choices are not necessarily in line with the socially optimal choice. This has implications for voting, for aid giving, for mass organization. Partiuclarly with regard to mass organization, even if Marx could convice workers that they were being exploited and needed to throw off the chains of oppression, the very size of the group in question will place a heavy presumption against the successful organization of a revolution. There will not be a revolution precisely because so many people want it.

This implies that insitutions that are able to overcome these collective action problems are necessary if society is progress beyond the tribal/family unit. For example the state can selectively incentivize individuals to co-operate for the greater good (by using tax funds to pay workers to build a road for example). Also the state can enforce property rights which are an essential component of the institutional hypothesis.]

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