The Analysis Of Owner’s Collective Action Dilemma

Currently, more and more residential quarters in China has introduced the institution of owner autonomy and property management. The institution of owner autonomy exists for the good co-operations between the owners and the common participation in public affairs to safeguard common interests in the district. If the owners are actively involved in collective action to maintain public interests in the district, it will have a benign impact on the residential development. In reality, in most of the districts, the owners have a really low degree of participation in collective action, or show an indifferent attitude on public affairs. This Phenomenon has planted serious hidden dangers for the long-term development of the residential areas. The owner’s collective action dilemma will affect the property management of the residential quarters, and it will even result in deeper contradictions between various stakeholders in residential areas, which will not be conducive to the enhancement of happiness of residents and the realization of a harmonious community. Therefore, the research on collective action dilemma between owners has important practical significance.The paper has investigated and discussed the related theoretical items using the public goods theory, property rights theory, the rational voter theory, the game theory and the individual importance theory, from the angle of public goods involved as well as the behaviors of the owners showed in collective action. Then relying on the field surveys on the Wuhan City Yu-long Island Residential District, this paper introduces in details the collective action dilemma faced by Yu-long Island residential owners. The dilemma mainly consists of three aspects, being difficult to hold Owners’General Assembly, being hard to form a collective decision and public resources being occupied and invaded.Through theoretical and practical considerations, this paper has established the owner’s collective action model. It is assumed that the owner’s decision-making process related to whether he will participate in collective action or not is divided into two phases. In the first phase, as a "rational voter" pursuing his own interests to maximize, the owner will carry out a cost-benefit analysis about the participation in collective action. This paper builds an owner’s rational voter model based on cost-benefit analysis. In the second phase, if the benefits outweigh the costs, that is to say the expected utility is greater than0, showing the satisfaction for the premise of the first phase of decision-making process, the individual owner will join in the game with other owners and choose to participate in collective action or not, according to the outcome of the game he has joined in. Based on this assumption, a two-owners game model based on the owner’s rational voter assessment results is built. Finally, according to the model results, ways to crack owner’s collective action dilemma are raised up from the viewpoint of institution innovation as well as organization formulation. Cracking ways include changing the voting rules to enhance the individual importance, reducing costs while increasing external incentives at the same time, improving the system of owners’ committee, and combining the property management and community management.