Several recent contributions have focused on the idea that market failure, in the form of environmental degradation, can represent entrepreneurial opportunity (Cohen & Winn, 2007; Dean and McMullen, 2007). Market failure has fascinated scholars in several disciplines including economics, sociology, management and political science, who have also modeled it as The Prisoner’s Dilemma and other related puzzles. Although the traditional solution to market failure from each of these disciplines is collective action (Olson, 1971, 1982; Ostrom, 1998), an entrepreneurial model of collective action has not been offered. This paper supplements these theories with an entrepreneurship-based process model of collective action.