Issues of collective action: common agency, partial cooperation, and clubs

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1998
Authors
Siqueira, Kevin
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Todd Sandler
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Economics
Abstract

The dissertation explores two topics of collective action. In the first two chapters, a modified common agency model is developed and used to investigate the impact of partial cooperation on agent incentives. Partial cooperation is introduced into the model through the assumption that it is only the smallest group of homogenous principals who are capable of overcoming the free-riding problem. In the first of two scenarios examined, the case where principals move simultaneously, it is shown that partial cooperation is self-defeating from the organizing principals' perspective despite a strengthening of agent incentives and effort. Consequently, there is no incentive for the principals to organize. In the second scenario, under the assumption that the smallest group of homogenous principals have a first-mover advantage, it is shown that this is not only individually beneficial to the cooperating principals, but the outcome in terms of agent incentives and effort, is also constrained Pareto efficient, better than even the standard, third-best common agency outcome. The interesting result from this last scenario illustrates the possibility that partial cooperation, when coupled with a strategic advantage, can improve efficiency;The second topic involves fixing the notion of the relation of cost sharing and membership size within the framework of club goods. The intuition is relatively straightforward and rests on the idea that with a given membership base and everything else held constant, a rise in costs will increase the benefit of cost sharing while a fall will reduce them. The third chapter shows that at least in certain cases, this intuition holds and as a result, depending on whether the benefits rise or fall sufficiently, one would expect to see a resulting rise or fall in membership.

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Thu Jan 01 00:00:00 UTC 1998