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Abstract

Cooperatives have been used as examples of successful collective action activities. However, member free riding within cooperatives and other collective action groups continues to be a challenge. The board of directors and management of United Producers Inc. confronted the member free riding issue when creating a restructuring plan after their Chapter 11 bankruptcy filing. The plan integrated three strategies which have been proposed to mitigate free riding in large groups; coercion, a federated organizational structure, and selective incentives. This article compares Mancur Olson’s theoretical framework for addressing free riding behavior with United Producers Inc. restructuring plan.

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