Annex A. Game theory and collective action

This annex briefly provides several simple examples from game theory that relate to collective action. Sandler (1992) provides a more detailed theoretical exposition. The examples presented below show that although the socially optimal provision of public goods is difficult because of free-rider problems, their provision by collective action may be possible under some conditions. Communication and trust among members, repeated opportunities for co-operation and the size of the benefit from co-operating are factors that favour co-operation. In addition, sanctions and voluntary agreements among members can facilitate co-operation and ensure the provision of public goods associated with agriculture.