A Behavioural Theory of Single Period Collective Action

Abstract

In institutional frameworks comprising of n>2 agents, there are often aspects of the institution or specific exchanges or entities within the institution that require to be changed. Carrying out such a change involves a game of co-ordination between the agents who wish to make it and they can only do so when their aggregate contributions are enough to make the change happen. If the aggregate contribution from all the agents is less than is required, the resultant payoff for those who did contribute is negative. Hence, the primary determinant of an agent’s action is the expectation of how other agents would act. This paper provides an analytical game theoretic framework for the payoff and participation requirements of agents developed using behavioural factors and parameters that determine agents’ decisions along with strategies to influence the behaviour of agents to obtain the requisite participation. It further provides applications of the framework in share mispricing on stock markets and in Hollywood’s #MeToo Movement.