D The individual optimum for collective goods

Figure B.5 also shows the individual optimum for collective goods. As I have said, there is no optimum for individual A. For individual B the optimum is 4 bridges, each at the price P. If A and B do not work together, 4 bridges will be built, which they can both then use. For this privilege, A will pay nothing and B will pay 4 times Pb. A's consumer surplus is thus equal to the area of the quadrangle Sa, and that of B is equal to the area of the triangle Sb. The total consumer surplus is thus equal to the area of the quadrangle Da+bDC'P, or to the total benefits (area of quadrangle Da+bDQO) less the total costs (area of quadrangle PC'QO).

If A and B do cooperate and add together their consumer surpluses through 'collective action', they can construct 6 bridges, as we saw in situation C.


Figure B.5 The collective optimum for collective goods

Van den Doel (1993) concludes, that the welfare optimum for individual goods differs in at least two respects from that for collective goods: firstly, 'in an optimum situation, different consumers consume different amounts of purely individual goods at the same price. However, in the same situation, different consumers will consume the same amount of purely collective goods at different prices'; secondly, 'the optimum for individual goods means that the marginal benefits for each individual consumer will be the same as the marginal costs of the good as a whole. However, the optimum for collective goods means that the marginal benefits totalled up for all consumers is equal to the marginal costs of the goods as a whole.'

Economists have worked out these four situations (a, b, c and d) in much greater detail. They have addressed the difficulties of representing the actual demand curve of consumers - in reality this will seldom be straight - and establishing how consumers will value several individual or collective goods in relation to each other in terms of benefits and sacrifices. However, the above descriptions are enough to indicate the essential difference between decision-making methods geared to an individual result, and decision-making methods geared to a group result. The difference between these two methods lies in the aggregation of the marginal benefits of the individuals. As indicated in situation c (collective optimum for collective goods), this aggregation must now be possible if the optimum group result is to be achieved.

The classical design methods, geared to systematic design, have never incorporated this step. They are focused on situation a: the individual optimum for individual goods. For a design commission there has to be a principal who decides, as an 'individual consumer', what the optimum is. The designer (this might also be a 'homogeneous' group of designers) designs goods at a particular price that have a certain value for the principal. The principal chooses on the basis of price and value. If there are several principals for the same good then, on the basis of the classic design method, this good will first have to be divided into individual parts, after which each principal will be given a say over his own part. Altogether they determine the optimum combination of these individual parts. This is situation b: the collective optimum for individual goods.

When situation c occurs - a group of principals want a number of goods, which they regard as collective goods - then the classic design method will attempt to keep the optimisation of this situation 'outside' the design process. Designers and design teams only need to draw up designs, plans and proposals for collective goods (bridges, parks). It is left to the principal(s) to decide on the number, price and users of these collective goods. In practice this is not possible. The need to design in a decentralised manner - principals (organisations) negotiate via their representative, their own designers, during the design process - means that collective action to aggregate individual marginal benefits can no longer be placed outside the design process.

In welfare theory, the government is usually the institution most suitable for performing this aggregation. In Open Design it is the open designer who takes care of the aggregation. Just as the government can only have credibility by complying with democratic principles, such as spending money only on matters agreed in parliament, the open designer must be genuine and open in dealing with stakeholders' constraints.

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