Collective action problems are situations where it is in the interest of the group to work together, but in which coordination is a challenge. Because of this, every individual has an incentive to act in their own interest. This video
explains it clearly.
A well-known example of a collective action problem is the tragedy of the commons.
The commons is a communal meadow where cows of different farmers can graze. Every farmer wants to earn as much as possible against the lowest possible costs and therefore has the individual incentive to let as many of his cows graze on the communal grass as possible. However, other farmers will do the same and soon the meadow will be destroyed due to overgrazing. There is little point in doing something about this for each individual farmer – knowing (or fearing) that other farmers will try and use the largest possible share of the communal grass and the meadow will still be overgrazed. The farmer is better off adding some more cows, so he will, at least, benefit from it in the short term. However, in the long term, all the farmers and as a consequence the community will lose out, because the piece of land can be written off due to overgrazing.
Examples of (serious and less serious) collective action problems are: global warming, traffic jams, overpopulation, dismal working conditions, keeping a student house clean, corruption, overfishing, etc.
Traditionally, there are two solutions to collective action problems:
Privatisation: the commons can be divided between the farmers. Now the farmers benefit from taking good care of their own piece of land, so that it is of use to them in the long term.
Regulation: Agreements can be made and enforced about the usage of the commons. It is, for example, possible to decide on a maximum number of cows per farmer.
However, these solutions are not applicable to all collective action problems. It is not so easy (or desirable) to privatise certain goods (how do you privatise the ozone layer? Or migrating fish populations?). Coming up with regulations and enforce these regulations to solve (cross border) problems has proven difficult - just think about the cumbersome process to do something about climate change on an international level.
So, we need a new solution to old problems: crowdacting.