Collective Action and Intra-group Conflict with Fixed Budgets

ABSTRACT

We study collective action under adverse incentives: each member of the group has a given budget (‘use-it-or-lose-it’) that is private information and can be used for contributions to make the group win a prize and for internal fights over this very prize. Even in the face of such rivalry in resource use, the group often succeeds in overcoming the collective action problem in the non-cooperative equilibrium. In one type of equilibrium, all group members jointly contribute; in the other type of equilibrium, volunteers make full standalone contributions. Both types of equilibrium exist for larger and partially overlapping parameter ranges.