Chapter_Four poli sci

Chapter_Four poli sci - Chapter Four: Collective Action...

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Chapter Four: Collective Action September 8, 2011
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The problem with common pool resources A common pool resource has many users sharing a resource. Individuals acting rationally to maximize their individual utilities produce a collectively irrational outcome. EX. WHAM Carpool Public policy requires that we know what motivates the behavior of individuals, but we must take into account that these individuals comprise groups.
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Externalities A negative externality occurs when an individual or firm engages in some market transaction or activity that imposes a cost on society that does not have to be paid for by the party causing the cost. Behavior changes when you have to pay the full cost of an action rather than part or none.
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Externalities A positive externality occurs if some benefit to the transaction is produced that spills over onto those who are not a party to the transaction.
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Property Rights Understanding how groups allocate control over resources is crucial to understanding
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Chapter_Four poli sci - Chapter Four: Collective Action...

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