Collective Action, Networks, and Critical Mass for Market Formation

The heterogeneous distribution of resources tends to reduce collective action problems. In this paper, we examine whether these insights extend to more complex settings of collective action. While perfect substitutability of resources is a fundamental assumption of existing collective action models, many collective causes, particularly those focused on market formation, require resources across distinct actors that are often imperfectly substitutable. We develop a formal model that shows that heterogeneity under conditions of imperfect substitutability actually exacerbates collective action problems. We examine the central mechanisms governing the existence and resolution of collective action dilemmas for complex causes and we identify the conditions under which collective action is more or less challenging. Analyzing the problem in the context of market formation, we explore implications for those settings with heterogeneous social structure. We discuss the implications of our findings for study of collective action dilemmas, mobilization strategies for collective action, and market formation research.