Collective Choice

Collective choice refers to situations in which two or more individuals jointly pursue a common objective.

As such, collective choice is fundamentally a problem of coordination. This is in contrast to instances in which individuals pursue similar or even identical objectives independently; in this case, coordination of individual actions is not expected.

Collective choice exists because humans have an inherent inclination to form and interact in groups. This is because there are many things that people can do collectively that cannot be achieved when acting individually or independently. Generally, collectives form voluntarily. Business firms, social clubs, religious organizations, social movements, caucuses, and governments are examples of collectives that form because individuals desire to achieve a common objective. However, sometimes collective choice arises in situations in which members are brought together involuntarily, as when people are called to jury duty or drafted in the army, or when children are added to families by birth or adoption.

Collective choice is necessary in the case of the public goods problem and the related tragedy of the commons. Public goods are goods or services that cannot be excluded from nonpayers and that do not diminish when consumed. Private firms are often reluctant to provide these goods; hence, their provision and distribution must be accomplished collectively. The tragedy of the commons refers to the tendency for people to overuse or exploit publicly available goods or common property. Sometimes the establishment and enforcement of private property rights can mitigate the exploitation of some common properties but, generally, these are ineffective in the case of goods that have characteristics of public goods. In these instances, collective choice regarding the use of common properties is almost always the most viable means of solving the tragedy of the commons.

Although there are advantages to collective choice, there are also problems that arise when people seek to make decisions and take actions collectively. For instance, members do not always agree on what the collective objective ought to be, and collectives do not always achieve their stated objective. The root cause of problems afflicting collective choice is that individuals interested in their own self-interest do not always behave in ways that support the collective. Two of the most important factors affecting the degree to which individual interests coincide with those of the collective are homogeneity of members and group size. Collectives with members having similar interests or characteristics are more likely to agree on and support [Page 341]collective objectives. Small groups are more likely to consist of members with similar interests when compared with large groups. Furthermore, in small groups individual members generally receive a greater fraction of total group benefits, and small groups also have lower organizational and coordination costs than large groups.

There are several problems that limit the effectiveness and desirability of collective choice. One problem is free riding on the joint efforts of others. Free riding means obtaining a benefit without expending an effort or paying a cost. Free riding is a problem if members join a group to obtain benefits of membership but have little or no intention of contributing to the group effort. For example, businesses using a team-based organizational structure often report difficulty in motivating all members of the team to contribute fairly. Simply, people might shirk if they believe it is difficult for superiors to assess precisely the individual effort of all team members. Another problem is members controlling or influencing the collective choice in their favor. One example of this is when employees spend time and effort currying favor with superiors at the expense of completing their assigned duties.

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