This paper provides a game-theoretical analysis of institutional investors’ collective engagements from the viewpoint of collective action theory, which allows us to examine the free-rider problem and social dilemmas. The author developed two different types of theoretical models with taking into account the difference in its nature of benefit from collective goods: collective engagements aiming to achieve excess market returns by influencing investee companies – collective engagements for excess market return –, where collective goods are rivalrous, and collective engagement aiming to affect corporate environmental and social policy and practices – collective engagement for environmental and social issues –, where collective goods are non- rivalrous. The key findings of this paper are as follows. Firstly, both types of collective engagements require a relatively higher amount of benefits than their costs to generate collective action, especially for the collective engagement for excess market return. Secondly, while the free-rider problem can be accompanied in both types of collective engagements, discouraging effect on cooperative behavior are larger in the case of the collective engagement for excess market return. Instead, the collective engagements for environmental and social issues would not be diminished even if the number of free- rider increases. Lastly, since there are many institutional investors in the markets, social dilemmas can emerge in the real-world situations. From the policymakers’ point of view, policy measures to promote cooperative behaviors among institutional investors can be justified to maximize social welfare.