Collective action problem is the following problem. There is a group of people. If a large percentage of the people take some action (cooperative action), then everyone ends up with higher utility. However, the cooperative action is detrimental to each person individually. Nobody will take the cooperative action because it's detrimental to them. The problem is: how to make people take that cooperative action so that everyone is happier? Example: There is a group of people living in one house. If everyone washes their dishes after eating (cooperative action), every person will be happier. But each person doesn't like to wash their dishes. Assuming that everyone of them is selfish, nobody will wash their dishes and everyone will be unhappy because of that.