INTRA-LEVEL AND INTER-LEVEL INTERACTION

This article develops a multi-level framework for modeling rational ac tion in context at any level of abstraction. It first shows how standa rd n-person collective action problems are affected by the presence an d nature of external competition from other groups. The use of public goods produced within a group as means for between-group competition f or a prize is shown to help overcome Prisoner's Dilemmas and hence fac ilitate the emergence of cooperation within groups. It is then shown h ow interaction on an arbitrary number of levels with an arbitrary numb er of actors at each level, radically changes the predicted rational b ehavior of each individual agent. By assuming groups, and groups embed ded in hierarchies, the multi-level model rectifies a number of reduct ionistically 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 dile mmas concerning the connection of micro- and macro-level analysis.