Mancur Olsen's Theory Of Free Rider Problem

ASSIGNMENT UDIT NARAYAN KUSULIA

MANCUR OLSON:

Mancur Olsen was from America. He was developed the theory of concentrated benefits and diffuse costs. His book is called “the theory of collective action: public goods and the theory of groups” it was published in 1965. He described the concept of free rider in his book.

GROUP:

Generally the set of people, who have the same interests or same aims and who organise themselves to do something togetherly to attain the common goal is called as a Group.

Here, Mancur Olson argues that the concentrated minor interests will be over represented and the majority interests trumped only because for a free rider problem. The free rider problem will be stronger when a group becomes larger. Here Olson said, if everybody in a group (that can be small or large group) have interests in common, then they will act collectively to achieve the common goal.

All the individuals in a group should act to achieve their collective interests though the group members are rational or self-interested. The rational or self-intersted individuals will seek to maximise their own welfare but they won 't act to attain common objectives unless there is a strong persuade to do so. Without any incentives the rational or self-intersted members they will not act to achive their common specific interests.

In a group only the unselfish