Collective Action with Uncertain Payoffs: Coordination, Public Signals and Punishment Dilemmas1 Mehdi Shadmehr2 Dan Bernhardt3 1We thank Ethan Bueno de Mesquita, Odilon Camara, Juan Carrillo, Andreas Hagemann, Jude Hays, Tom Parker, Kris Ramsay, Milan Svolik, seminar participants at UIUC departments of political science and economics, Caltech, 2010 and 2011 MPSA Conferences for helpful suggestions. We also appreciate the constructive comments of anonymous referees and the editor, Gary Cox. 2Department of Economics, University of Miami, Jenkins Hall, Coral Gables, FL 33146. E-mail:
[email protected] 3Department of Economics, University of Illinois, David Kinley Hall, Urbana, IL 61801. E-mail:
[email protected] Abstract We provide a framework for analyzing collective action in contentious contexts such as protests or revolutions when individuals are uncertain about the relative payoffs of the status quo and revolution. We model the \calculus of protest" of individuals who must decide whether to submit to the status quo or revolt based on personal information about their payoffs. When deciding whether to revolt, a citizen must infer both the value of successful revolution and the likely actions of other citizens. We characterize the conditions under which payoff uncertainty overturns conventional wisdom: (a) when a citizen is too willing to revolt, he reduces the incentives of others to revolt; (b) less accurate information about the value of revolution can make revolt more likely; (c) public signals can reduce the likelihood of revolt; (d) harsher punishment can increase the incidence of punishment; and (e) the incidence of protest can be positively correlated with that of repression. Introduction \Revolution, like Saturn, devours its own children".1 Many leaders of successful revolutions and political protests later experience far worse outcomes than they could reasonably have expected under the status quo.