![]() ![]() Therefore here each individual’s firm’s interest is different to that of other firms, for more the firms sell, there will be lower price and income for any given firm and this is also quite true that if a group of firms cannot reach a collusive agreement in the marketplace, they will not be able to form a group and lobby the government for help. But here a firm has self-interest, it wants to sell as much as it can, until its cost of producing another unit exceeds the price of that unit. But according to Olson, this does not happen, since there is a uniform price in a market, therefore a firm cannot get a higher price unless all the other firms in the industry have this higher price. If the firms decides to cut their output and charge a price higher than the one that prevails under perfect competition all firms would make a profit. In this condition, all firms will end up charging the same price, a price that leads to a zero economic profit. ![]() In Perfect Competition Market whereby there are very large number of producers of an identical good. There are self interested Individuals too in groups that goes contrary to the Interest of the group. This means in the Collective Action it is not necessary that all would gain and achieve their group objective. Indeed unless the number of individuals in a group is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common or group interests.”( Moffet Mike, Special Interests and Economic Policy). It does not follow, because all of the individuals in a group would gain if they achieved their group objective, that they would act to achieve that objective, even if they were all rational and self-interested. “But it is not in fact true that the idea that groups will act in their self-interest follows logically from the premise of rational and self-interested behavior. If group of people have a common interest then they’ll naturally get together and fight for the common goal, but according to Olson: This involves Management of natural resources, providing facilities for joint Investment by small farmers, dissemination of technologies, Marketing, group empowerment, many other development policies etc. The capacity to perform the tasks that affect the whole community or group is a most important function of collective action. In the Social arena, its theories emphasized how can Collective Action be linked to social institutions for performing welfare activities, whereas economically it is concerned with the provision of public goods, other collective consumptions through the collaboration of two or more individuals, and the impact of external forces on group behavior. It means in pursuit of shared Interest (Marshal 1998), framing rules for profitable utilization of resources, and voluntary methods. It means following those set of standards of social integration as well as those factors that leads to the attainment of maximum benefit from the combined action of group, whether it is social, economical, political, or any other field. Solutions to overcome collective action problemīy Collective action we mean to follow the goal or set of goals by more than one person, together to attain the fruitful gains. ![]()
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