Group formation: The interaction of increasing returns and preferences' diversity
AbstractThe chapter is organized as follows. Section 2 focuses on competition in a simple economy under increasing returns to scale and heterogeneous consumers. The concept of sustainable oligopoly is discussed and analyzed. Section 3 studies in a more general and abstract set up competition among groups in the absence of spillovers. Whereas Section 3 develops some insights of Section 2, it can be read first. Finally Section 4 analyzes public decisions in a simple public good economy through the previous approach, and addresses the interaction between free mobility and free entry under negative externalities.
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Date of creation: 2005
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Publication status: Published, Group Formation in Economics: Networks, Clubs and Coalitions, Cambridge University Press (Ed.), 2005, 171-208
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- Gabrielle Demange, 2004. "Group formation: The interaction of increasing returns and preferences' diversity," DELTA Working Papers 2004-30, DELTA (Ecole normale supérieure).
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