I love to bake. I’m always looking for new ideas, so I spend quite a bit of time on the web browsing various cooking sites. There are zillions of sites on the web that provide free access to recipes. (I just performed a Google search on “free recipes” and got almost 36 million hits). But what I particularly like is the sites that allow readers to rate and comment on the recipes. The rating and comments are valuable to me because they let me know which recipes I shouldn’t bother with and how to improve the recipes I would like to try.

Most readers are probably nodding their heads as they read this, thinking about how they use the same type of information to help them decide which movies to watch, which books to read, which car to buy, and so on. Indubitably, this type of user-created content provides a lot a value to many people in many different venues.

I must confess, though, that while I have read through hundreds (or more likely thousands) of recipes together with associated reader comments, and I have used quite a bit of this type of information in my baking adventures, I have never actually left a comment myself. In other words, I’ve been free riding (my sister, the forum maven, calls me a “lurker”) on the information provided by others.

This has got me thinking about the idea of mass collaboration or collective action and why people participate in various projects that provide value to others who fail to reciprocate. In other words, what makes collective action sustainable, despite the existence of free riders?

I’ll be puzzling out this idea in a series of blog posts.

Let me first provide some concept definitions.

Free riders are “those who consume more than their fair share of a resource, or shoulder less than a fair share of the costs of its production.”

Public goods are goods that are non-excludable (i.e. one person cannot reasonably prevent another from consuming the good) and non-rivaled (one person’s consumption of the good does not affect another’s, nor vice-versa). One of the classic examples of public goods is national defense. When a country provides protection for its citizens, it cannot prevent any particular citizen from enjoying the benefits, and the fact that any particular individual benefits from the public provision of national defense doesn’t prevent any other person from also benefitting from it. In contrast, any privately owned property is excludable, since the owner can prevent anyone else from accessing it. And most depletable products (say, an apple) are rivaled, because if one person consumes them then others cannot. My particular interest relates to the public good of information.

“The economic theory of collective action is concerned with the provision of public goods (and other collective consumption) through the collaboration of two or more individuals, and the impact of externalities on group behavior. It is more commonly referred to as Public Choice.”

The Logic of Collective Action says that “individuals in any group attempting collective action will have incentives to ‘free ride’ on the efforts of others if the group is working to provide public goods. Individuals will not ‘free ride’ in groups which provide benefits only to active participants.”

Regarding the private provision of public goods “the most common problem is the lack of any producer’s ability to exclude beneficiaries in a low-cost fashion (or, equivalently, the inability of the provider to reap all the gains associated with the provision of the good), a condition that generates the free-rider problem, resulting in an expectation that the good will be underprovided. The standard solutions offered are government provision of the good, through purchase or production, or government subsidization of its private provision.”

To be continued ...