Collective Action and Market Formation: An Integrative Framework

While extant research recognizes the importance of collective action for market formation, it provides little understanding about when and to what extent collective action is important. In this paper, we develop a novel theoretical framework detailing what collective action problems and solutions arise in market formation and under what conditions. Our framework centers on the development of market infrastructure with three key factors that influence the nature and extent of collective action problems: perceived returns to contributions, excludability, and contribution substitutability. We apply our framework to diverse market formation contexts and derive a set of attendant propositions. Finally, we show how collective action problems and solutions evolve during market formation efforts and discuss how our framework contributes to strategic management, entrepreneurship, and organization literatures.


Brandon H. Lee, Jeroen Struben, and Christopher B. Bingham. 2018. Collective Action and Market Formation: An Integrative Framework, Strategic Management Journal, 39(1): 242-266:

2017-12-14T16:35:30+00:00 By |

About the Author:

Jeroen Struben
Jeroen Struben is Associate Professor of System Dynamics in the Strategy & Organisation Department at EM Lyon Business School and research affiliate at MIT Sloan School of Management. Jeroen received his PhD at MIT’s Sloan School of Management and holds an MsC in Physics from Delft University of Technology. Jeroen Struben is a social and systems scientist who studies dynamics of market formation and transformation towards more sustainable pathways. His research addresses questions such as “How do alternative products and practices penetrate in the marketplace - or society at large, rather than falter?”. Jeroen analyses market formation processes, focusing on the over-time interactions across stakeholders working through both social and material adoption challenges. He conceptualizes and studies these efforts as market formation processes because significant uptake of such products involves the joint development of consumer familiarization, complementary infrastructure, and technology improvement for example. Jeroen tackles these problems using methods ranging from simulation to empirical analysis of large spatiotemporal datasets. His current research program consists of three projects: (I) Market formation for alternative fuel vehicles, (II) Market formation for nutritious food, and (III) Market formation theory. Jeroen’s research produces insights for both scholars and practitioners about coordination and collective action across organizations, industries and governments. Jeroen teaches topics related systems thinking, sustainability, and innovation. Through his research Jeroen has worked with organizations across a variety of sectors ranging from automotive (Ford, GM, SAIC Shanghai), to energy (Shell, National Renewable Energy Laboratory, United States Department of Energy (DOE), Johnson Controls China), public health (PHAC), and to fisheries (NOAA, GCDC).

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