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Intraorganizational Influence Relations and the Optimality of Collective Action

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  • Pinhas Zusman
  • Gordon C. Rausser

Abstract

Collective action, although often superior to anarchy, tends to be socially suboptimal even when the proclivity of free riders to defect is fully controlled and an organization for collective action is set up. An effective organization for collective action involving many participants will likely feature a coordinating center and peripheral participants. Even if all the overall group objective is fully internalized by the center, the organizational equilibrium is suboptimal as it reflects the influence of narrowly rational peripheral participants. The efficiency loss is particularly evident on collective action over time, where group choices even within a single generation are likely to be myopic-a propensity further exacerbated by the center's short planning horizon.

Suggested Citation

  • Pinhas Zusman & Gordon C. Rausser, 1992. "Intraorganizational Influence Relations and the Optimality of Collective Action," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 92-gatt20, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:fpaper:92-gatt20
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    2. Finkelshtain, Israel & Kislev, Yoav, 1995. "Prices vs. Quantities: The Political Perspective," Working Papers 232682, Hebrew University of Jerusalem, Center for Agricultural Economic Research.
    3. Ma, Meilin & Zhu, Heng, 2014. "Decision Making Among Heterogeneous Members: A Study on Economic Efficiency under the Centralized Structure of Chinese Farmer Professional Cooperatives," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 168366, Agricultural and Applied Economics Association.
    4. Bontems, Philippe & Fulton, Murray, 2009. "Organizational structure, redistribution and the endogeneity of cost: Cooperatives, investor-owned firms and the cost of procurement," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 322-343, October.
    5. Liang, Qiao & Hendrikse, George, 2016. "Pooling and the yardstick effect of cooperatives," Agricultural Systems, Elsevier, vol. 143(C), pages 97-105.

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