To the theory of collective actions. Part 3. Conditions for achieving an optimum

Abstract

The subject of this research is opportunities for effective use of human capital members of the collective in the conditions of self-governance and self-organization resources. It is assumed that members of the collective are capable to jointly create an additional cost by making individual efforts. Value of the expected gross income increases with the efforts put by each agent, and subordinated to the law of diminishing returns. The goal of each member of the collective consists in maximization of the own individual profit. Overcoming ineffective equilibrium faced by the collective as a result of independent choice of amount of effort applied by the members, and achievement of Pareto-preferred outcome requires corresponding coordination of collective actions. The key goal of coordination consists in overcoming opportunistic behaviors in form of shirking and such setting of incentive system that would results in application of optimal efforts by all members of the collective. Within the framework of mathematical model structured on the general principles, the author determines the essential conditions for achieving this goal. One of them dictates a corresponding strategy, another one – formulates the ex post rule of distribution of value of the expected gross income, perceived by all members of the collective as ex ante. According to this rule, the portion of each member of the collective in gross income must be equal his portion of efforts. Acceptance of this rule allows implementing a strategy, which motivates each member of the collective to apply efforts that would meet the maximal combined profit.