INTRA-LEVEL AND INTER-LEVEL INTERACTION

This article develops a multi-level framework for modeling rational action in context at any level of abstraction. It first shows how standard n-person collective action problems are affected by the presence and nature of external competition from other groups. The use of public goods produced within a group as means for between-group competition for a prize is shown to help overcome Prisoner's Dilemmas and hence facilitate the emergence of cooperation within groups. It is then shown how interaction on an arbitrary number of levels with an arbitrary number of actors at each level, radically changes the predicted rational behavior of each individual agent. By assuming groups, and groups embedded in hierarchies, the multi-level model rectifies a number of reductionistically biased results flowing from the conventional single-level one-group model. Accounting for combined intra-level and inter-level interaction is also suggested as a way out of general theoretical dilemmas concerning the connection of micro- and macro-level analysis.