POL203Y5 Lecture Notes - Lecture 5: Market Failure, Methodological Individualism
Document Summary
Collective action problems: acting individually instead in a group, better outcome in a group, enforce through taxes to solve the cap, goal cant be achieved if only a few people participate. Framework for understanding social and economic thought- micro-economic behaviour. We all in a group and we want to achieve a collective good we need to recognize that we need to achieve that good though our own individual action. Rational- weight pros and cons, being consistent over time. Not a way to determine how decisions are made but how to determine the outcomes or pattern choices. Mancur olsen- collective action problems he coined it. Freerider theory: causes market failure, when the allocation of goods and services are not great.
