Evolution, Teamwork and Collective Action: Production Targets in the Private Provision of Public Goods

Collective-action problems arise when private actions generate common consequences; for example, the private provision of a public good. This article asks: what shapes of public-good production function work well when play evolves over time, and hence moves between equilibria? Welfare-maximising public-good production functions yield nothing when combined efforts fall below some threshold but otherwise maximally exploit the production-possibility frontier. They generate multiple equilibria: coordinated teamwork is integral to successful collective actions. Optimal thresholds correspond to the output that individuals who pay all private costs but enjoy only private benefits would be just willing to provide. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.