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A recent attempt to revive retributive theories of punishment, pioneered by Herbert Morris and Jeffrie Murphy, argues that punishment restores the balance of benefits and burdens in a society; a balance that is disturbed by crime. Classic and contemporary statements of this position are examined and rejected. The conclusion is that fair‐play theory, with its emphasis on free riding, does not have an adequate account of ‘wrong’.

This chapter examines Mancur Olson's arguments, which he articulated in The Logic of Collective Action, and compares them with those of his supporters and detractors. It also reviews the social science literature on cooperation, focusing primarily on the theoretical and empirical research on collective action that grew out of Olson's challenge. According to Olson, the members of a group have interests in common. His logic was an economic logic, based on the behavior of firms in the marketplace in their quest for profits. Olson extended this logic of the market to human social behavior. The chapter considers Olson's solutions to the problem of free riding and the possibility that no group would ever form, including coercion, small groups, selective benefits, and the by-product theory of public goods provisioning. Finally, it describes some major extensions of and challenges to Olson's path-breaking model.

This chapter explores the specificities, strengths, and weaknesses of the idea of reciprocity as a basis for intergenerational obligations. Three models are presented: descending, ascending, and double reciprocity. Each of these three models is tested against three objections. The first objection asks why having received something from someone would necessarily entail the obligation to give back. The second objection questions the ability of each model to justify the direction of reciprocation. A final objection looks at the extent to which reciprocity-based views adjust the content of our obligation to the fluctuations in population size.

The literature on the economics of international environmental agreements has been developing for two decades. Some significant progress has been made. But some simple and fundamental questions remain unanswered, such as the Schelling Paradox of why intertemporal environmental agreements that benefit the developing world should be easier to achieve than agreements on development assistance involving no intertemporal dimensions. This chapter provides a general review of what the literature on the economics of international environmental agreements has taught us and what the implications are of that literature for the actual world of environmental agreements. Four possible anomalies are identified between the theory of international agreements and empirical evidence. (1) Why do individual countries appear to be willing to act unilaterally, when that is not individually rational in the standard sense? (2) Why is country income ignored in theory whereas it is a dominant issue in the ‘real world’. (3) Why does theory predict more free‐riding than one finds in experimental work or even casual empiricism of actual experience with treaties? (4) Why do increases in the benefit–cost ratio for abatement tends to decrease agreement size in theory but have the opposite effect in experiments. The chapter suggests that social preferences may offer a way of bringing theory and empirics closer together for the case of international environmental agreements.

This chapter focuses on the evolution of strong reciprocity. A predisposition to cooperate and a willingness to punish defectors is known as strong reciprocity, and it is the combination of the two that is essential to human cooperation. Punishment reduces the gain to free-riding, and may induce even entirely self-interested individuals to cooperate. Before explaining how a willingness to punish those who violate social norms even at personal cost could have evolved, the chapter considers how punishment is coordinated among group members so that it is contingent on the number of others predisposed to participate in the punishment. It also shows that punishment is characterized by increasing returns to scale, so the total cost of punishing a particular target declines as the number of punishers increases. Finally, it discusses the results of simulations that illustrate the emergence of strong reciprocity and examines why coordinated punishment succeeds.

This chapter asks whether the members of Group O (see chapter 11) have individual reasons to contribute to the group’s efforts by adhering in at least some suboptimal-result cases. It is argued that if enough of them are actually contributing, then they all have moral reasons to contribute in order to avoid riding free on one another. If too few of them are contributing, however, then the case for contributing becomes more difficult to make. Three possible moral principles are suggested, any one of which would support contributing under conditions of general defection. If one of them is true, then it can be argued that judges have reasons to adhere in at least some suboptimal-result cases, even when most other judges are deviating too frequently. This discussion culminates in the defense of individual policy, which specifies permissible deviation rates for judges based in part on how often other judges deviate. The chapter concludes that we must choose between (1) denying that judges must obey restrictive rule, because we have found no sound argument for that conclusion, and (2) accepting as a foundational principle, requiring no argument, that judges must obey restrictive rule.

This chapter addresses a series of objections to the claimed epistemic properties of majority rule and, more generally, aggregation of judgments. It first considers a general objection to the epistemic approach to voting, which supposedly does not take seriously enough the possibility that politics is about aggregation of interests, rather than aggregation of judgments. The chapter also considers the objection from Arrow's Impossibility Theorem and the doctrinal paradox (or discursive dilemma). Next, the chapter addresses the problem of informational free riding supposedly afflicting citizens in mass democracies, as well as the problem of the voting paradox (as a by-product). Finally, the chapter turns to a refutation of the objection that citizens suffer from systematic biases that are amplified at the collective level.

This chapter focuses on the problem of collective action as it relates to development at the operational level. It first explores how individuals’ motivation may hamper their incentive to work together. Next, it looks at how missing or asymmetric information about the actions or characteristics of individuals may also inhibit their cooperation. This exploration of collective-action problems is undertaken using the Institutional Analysis and Development framework.

Although esteem cannot readily be the object of direct exchange, something rather like exchange can be secured in the economy of esteem via associations. By being ‘associated’ with B, A can earn ‘borrowed glory’ from B–and vice versa. The associations that so form may be very loose: all that is required is for the individuals to be associated in some esteem relevant way. The set of all Nobel Laureates is an association in this sense. An important feature of the advantages of association here is the presence of ‘economies of scale’ in publicity. One such scale effect relates to the ‘teleological paradox’: blowing the trumpet of a group of which I am a member is much less disestimable than blowing one’s own trumpet! But stronger forms of association–what we call ‘groups’–can serve the additional function of creating superior audiences for members. If the esteem of those highly esteemed is worth more, then high esteem individuals will tend to coalesce in ‘mutual admiration societies’. We discuss the optimal size and composition of groups and associations–emphasizing the hierarchical tendencies of the structure, that is, the most esteemed will tend to band together; then the next most esteemed; and so on. We suggest reasons why esteem groups and associations may be especially good at solving natural free-rider problems.

This chapter examines the evolutionary roots of the proximate psychological mechanisms that underlie cooperation. The idea that there are specific biological mechanisms behind at least some aspects of cooperation is supported by recent work in behavior genetics. One common technique in behavior genetics is to compare identical twins to fraternal twins. Another study, using a different technique, found a relationship between voter turnout and two specific genes. Hormones provide another window onto the proximate psychological mechanisms underlying cooperation. The chapter first considers the most basic form of cooperation, reciprocity, before discussing its relation to culture, the avoidance of individuals prone to free riding, and detection of cheaters. It also explores indirect reciprocity, generosity as performance, and hard-to-fake signals.

Voluntary esteem associations form for the purposes of magnifying positive esteem of their members. But individuals can be disesteemed by virtue of their being associated–as members of a race might be in a case of racial prejudice. This will imply: that members of the disesteemed association will not be given access to ‘voluntary’ esteem associations for which they would otherwise qualify; and that individuals’ esteem is attached to the esteem of the association to which they are assigned whether they like that or not. Such involuntary associations can readily form groups: only ‘in-group’ esteem may be available for them. Moreover, such groups may be especially good at managing free-rider problems by mobilizing extreme in-group loyalty. Or at least, will be so unless individuals can disguise their membership of the disesteemed class. Secrecy and the related phenomenon of ‘coming-out’ are discussed in this connection.

This chapter investigates the ability of religion to check free-riding in the use of public goods. Madrasas and mosques produce public goods in the form of trained imams and the performance of religious rituals, which are utilized by believers. It is impossible to monitor the contribution of each individual believer in the production and maintenance of this public good, yet enough believers choose to make a contribution rather than free-ride. This presents a puzzle, for theory suggests that rational individuals should prefer to free-ride, especially when no religious injunction makes their contribution mandatory. Based on discussions with individuals who regularly donate to the mosque and madrasas whose services they utilize, the chapter develops a detailed theory of religious reward, and finds in this an answer to the quandary of the economically irrational behavior noted above—the willingness to donate, the conversion of competition into deference, and the transitive nature of religious beliefs. The chapter also draws on other studies to illustrate how the complexity of rewards is central to explaining not just religious behavior but also much altruistic and ideologically driven behavior.

This chapter analyzes existing U.S. Supreme Court case law with respect to, on the one hand, antitrust’s minimum resale price maintenance plans, bundling and tying practices, as well as refusals to deal, and, on the other hand, trademark law’s dilution, postsale, sponsorship, and initial interest confusion doctrines, including design patent and selected areas of copyright law. It demonstrates that courts, based on the free riding hypothesis, have come to protect increasing amounts of artificial shortage of everyday consumer goods and services and corresponding incentives to innovate. Through the preservation of such values, antitrust and intellectual property laws have evolved into “dilution laws” and have focused, almost exclusively, on the refurbishment of the technological supply side of our present-day digital economies rather than also on the human demand side of “creative consumption.”

Free riding occurs in the practical domain when some action is rational for each group member to perform but such that when everyone performs that action, it is worse overall for everyone. Dunn argues that some surprising empirical evidence about group problem-solving reveals that groups will often face cases where it is epistemically best for each individual to believe one thing, even though this is ultimately epistemically worse for the group that each member believes in this way. Dunn’s work is thus an extension of work on the division of cognitive labor and ways that group inquiry might differ from individual inquiry.

This chapter identifies an important inbuilt difference between the two paradigms with respect to innovation diffusion. The difference springs from the fact that, unlike producers, free innovators do not protect their innovations from free adoption, and they do not sell them. As a result, benefits that free-riding adopters may gain are not systematically shared with free innovators—there is no market link between these parties. This chapter thus presents evidence for the systematic shortfall in free innovators' incentives to invest in the diffusion of free innovations, and then argues that it is caused by the absence of a market link between free innovators and free-riding adopters. The chapter then concludes with suggested ways for addressing this situation.

Looking ahead, the legacy of the crisis years shapes fiscal policy coordination. The two main aspects of change considered in this chapter are purview and pliancy. First, fiscal policy has ceased to be defined in narrow ‘low-deficit’ targets and instead is set to encompass a twin notion of free riding: growth free riding and stability free riding. Second, fiscal policy coordination has become more flexible and as a result more adaptive to the challenges of sound public finances in the twenty-first century. While the institutional architecture for collective action has been strengthened, there is little reason to be optimistic as to the containment of endemic second-order free riding. Member states, this chapter argues, are continuing to rely on market discipline as the erratic enforcer of rules they are unable to bring to bear amongst themselves.

Diverse groups are a hotbed for free riders. This chapter thus tests whether fiscal policy coordination was marred by collective action failure. The central claim of this chapter is that accusations of stability or growth free riding are not borne out by factual evidence. Using regression analysis and Qualitative Comparative Analysis, the chapter shows that despite their greater ability to free ride (given their political clout and trade links), larger and more open economies implemented larger stimulus programs. Fiscal policy is further analyzed vis-à-vis a country’s fiscal space. Results show that, by and large, member states stimulated their economies in line with their fiscal room for maneuver. These findings are contrasted with the political discourse of the time, when indictments of growth free riding were widespread. Accusations of beggar-thy-neighbor politics were rife; first-order free riding was not.

Fiscal policy coordination is marred by a classic collective action problem; it pays to be egoistical. Member states have an incentive to under- or over-stimulate their economies (what this chapter terms growth and stability free riding), despite a common interest in coordinated policies. Building on Mancur Olson’s premise on collective action failure, the chapter develops three research questions that guide the empirical investigation. These relate to the group latency of EU membership, the evidence for collective action, and finally the provision of incentives to keep free riding at bay. The theme running through this chapter is that the interdependence of EU economies requires cooperative solutions to common problems.