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Technological Determinants of the Group-Size Paradox

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  • Martin Kolmar
  • Hendrik Rommeswinkel

Abstract

The present paper analyzes situations in which groups compete for rents. A major result in the literature has been that there are both cases where larger groups have advantages and cases where they have disadvantages. The paper provides two intuitive criteria which for groups with homogenous valuations of the rent determine whether there are advantages or disadvantages for larger groups. For groups with heterogenous valuations the complementarity of group members’ efforts is shown to play a role as a further factor.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-02/cesifo1_wp3362.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3362.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3362

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Related research

Keywords: contests; public goods; group-size paradox;

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References

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  1. Wolfgang Leininger, 2003. "On evolutionarily stable behavior in contests," Economics of Governance, Springer, vol. 4(3), pages 177-186, November.
  2. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, Octomber.
  3. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  4. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
  5. Paul Pecorino & Akram Temimi, 2008. "The Group Size Paradox Revisited," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 785-799, October.
  6. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  7. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 48-55, February.
  8. Thierry Pénard & Sylvain Dejean & Raphaël Suire, 2011. "Olson’s Paradox Revisited: An Empirical Analysis of Incentives to Contribute in P2P File-sharing Communities," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201105, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  9. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Cooperation in collective action," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 473-498, 07.
  10. Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics.
  11. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, vol. 41(2), pages 345-357, November.
  12. Stein, William E, 2002. " Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-36, December.
  13. Joan Esteban & Debraj Ray, 2008. "On the Salience of Ethnic Conflict," American Economic Review, American Economic Association, vol. 98(5), pages 2185-2202, December.
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Cited by:
  1. Kolmar, Martin, 2013. "Group Conflicts. Where do we stand?," Economics Working Paper Series 1331, University of St. Gallen, School of Economics and Political Science.

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