In Class Unit 4.1 Flashcards
Organizations are..
concrete things
Institutions are..
cultural blueprints around which these are built
Institutionalization
forms organizations
2 types of interests and goods
- individual interests
- collective interests
Individual interests
person – needs – disequilibrium – autonomy – individual (private) goods
Collective interests
interdependence – insituations – organization – collective interests – disequilibrium – collective (public) goods
Collective goods
contribute to the welfare of the system ex: public parks.
How collective goods are generated
through contributions (sacrifices) of individuals (taxes)
Problems related to collective goods
- available to everyone, independent of contribution (taxes)
- individual contribution only slight benefit to the system but significant cost to the individual
Free rider problem
autonomy drives us to strain the collective interests that sustain us (incentive to cheat)
Collective goods are necessary for ..
the maintenance of collective interests
Collective interests arfe import to the..
preservation of order (integration)
Individual contributions to collective goods are ____ but individual costs to collective goods are ____
small; high
2 illustrations of consumption of collective goods
- tragedy of the commons
- prisoners dilemma
Tragedy of the commons
reasonable action leads to remorseless destructions