A Human Relations Paradox
AbstractWe present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in equilibrium. Moreover, a member who experiences an increase of positive emotional benefits in a group may become worse off in equilibrium.
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Bibliographic InfoPaper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 11/145.
Length: 13 pages
Date of creation: Apr 2011
Date of revision:
Group formation; competitive markets; human relation; exit;
Other versions of this item:
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D60 - Microeconomics - - Welfare Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-07 (All new papers)
- NEP-CDM-2011-05-07 (Collective Decision-Making)
- NEP-HRM-2011-05-07 (Human Capital & Human Resource Management)
- NEP-SOC-2011-05-07 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gersbach, Hans & Haller, Hans, 2011. "Groups, collective decisions and markets," Journal of Economic Theory, Elsevier, vol. 146(1), pages 275-299, January.
- Postlewaite, Andrew, 1979. "Manipulation via Endowments," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 255-62, April.
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