Collective Action Problem

A collective action problem occurs when individuals, acting in their own self-interest, choose not to contribute to a common goal, even though everyone would benefit if they all participated. This often leads to under-provision of the public good or failure to address shared issues, like environmental conservation or public safety. Because each person might prefer to free-ride—benefiting without effort—the group as a whole may struggle to achieve anything meaningful. Overcoming this requires coordination, trust, or incentives to encourage everyone to contribute toward the collective benefit.