Most activities we observe in society — political, social or economic — are carried out by groups or organizations rather than by individuals. Presumably, this is so because in many instances the outcome obtained by pooling efforts is larger than the sum of what is achievable at the individual level. However, the potential advantages of collective action critically depend on the possibility of distributing the benefits from cooperation in ways that pay all potential partners to cooperate. This

is the well known free-rider problem. Individual rewards depend on the action contributed by other group members as well as on one’s own. In particular, individuals bear only partially the adverse consequences of reducing their contributed effort. Consequently, collective effort typically falls below the groupoptimal
level.