The logic of collective Action By Action Y.F

The logic of collective Action By Action
By Mancur Olsen


Some critics may argue that the rational person will, indeed, support a large organization, like a lobbying organization, that works in his interest, because he knows that if he does not, others will not do so either, and then the organization will fail, and he will be without the benefit that the organization could have provided. This argument shows the need for the analogy with the perfectly competitive market. For it would be quite as reasonable to argue that prices will never fall below the levels a monopoly would have charged in a perfectly competitive market, because if one firm increased its output, other firms would also, and the price would fall; but each firm could foresee this, so it would not start a chain of price-destroying increases in output. In fact, it does not work out this way in a competitive market; nor in a large organization. When the number of firms involved is large, no one will notice the effect on price if one firm increases its output, and so no one will change his plans because of it. Similarly, in a large organization, the loss of one dues payer will not noticeably increase the burden for any other one dues payer, and so a rational person would not believe that if he were to withdraw from an organization he would drive others to do so. 



In this paragraph it shows how a person support an organization not to loose on benefits that it has to offer. It states that when a number of firms increased its output, the price will fall but if the number of the firms involved its large no one will notice the effect on price if the firm it increases their output, as it states some people may argue the support of large organizations because if they do not others wont either. This paragraph describes the competitive market and the need for analogy.