Collective action problem -- this occurs when a group of individuals, each acting in his or her own interest, has a negative outcome for the group. The prisoner’s dilemma is an example of a collective action problem. “Individual rationality leads to collective irrationality.”
enticement -- one of the tools that governments use in order to get people to comply with laws that protect the collective interest. For example, public goods: roads, public transportation, clean air, clean water.
coercion -- another tool that governments use in order to get people to comply with laws that protect the collective interest. For example, traffic fines as a means of forcing people to comply with speed limits, road signs, etc...
prisoner’s dilemma -- the prisoner’s dilemma arises whenever individuals, who ultimately would benefit from cooperating with each other, also have a powerful and irresistible incentive to break the agreement and exploit the other side. This only works when the party breaking the agreement is sure that the other party intends to uphold their end of the bargain. For example, whenever individuals decide that even though they support some collective undertaking, they are personally better off pursuing an activity that rewards them individually despite undermining the collective effort.
free riding -- this occurs when an individual does not contribute to the collective effort, but still reaps the benefits of the collective effort. The larger the group, the smaller the effect of each individual’s contribution, and the more likely this will occur. The book provides the example of public television: Less than 10% of regular viewers make donations, so public television requires government subsidies to stay in business.
Example of free riding- people who said they would work on this but didn’t
The book provides the example of public television: Less than 10% of regular viewers make donations, so public television requires government subsidies to stay in business; welfare programs
tragedy of the commons- In economics, the tragedy of the commons is the depletion of a shared resource by individuals, acting independently and rationally according to each one's self-interest, despite their understanding that depleting the common resource is contrary to the group's long-term best interests.
politics- activities that relate to influencing the actions and policies of a government or getting and keeping power in a government. A nation’s politics is how their government is run and what each nation is trying to achieve through government use. representative government- Representative government first came to use in Ancient Greece. It is the concept that a select group of people are chosen to represent the people in government. For example, our congressmen and women are our representatives to Congress and, in theory, should best represent the people of their district that they possibly can.
private goods - A product that must be purchased in order to be consumed, and whose consumption by one individual prevents another individual from consuming it. Economists refer to private goods as "rivalrous" and "excludable". If there is competition between individuals to obtain the good and if consuming the good prevents someone else from consuming it, a good is considered a private good. Examples = food, clothing, airplane rides, and cell phones. Private goods are less likely to experience the free rider problem because a private good has to be purchased public goods - A product that…