The Fear of Exclusion: Individual Effort when Group Formation is Endogenous
AbstractTo secure their membership in a popular group, individuals may contribute more to the group’s local public good than they would if group formation were exogenous. Those in the most unpopular group do not have this incentive to contribute to their group. Substantial differences in individual efforts levels between groups may be the result. A principal may prefer either exogenous or endogenous group formation, depending on whether an increase in contributions to the local public good coincides with the principal’s interests. We analyze two examples: Social interaction in schools, and multiple-task teamwork.
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Bibliographic InfoPaper provided by Oslo University, Department of Economics in its series Memorandum with number 09/2005.
Length: 23 pages
Date of creation: 21 Apr 2005
Date of revision:
Publication status: Published in Scandinavian Journal of Economics, 2007, pages 531-550.
Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Local public goods; opportunity costs; popularity; multiple-task principalagent analysis.;
Other versions of this item:
- Kjell Arne Brekke & Karine Nyborg & Mari Rege, 2007. "The Fear of Exclusion: Individual Effort when Group Formation is Endogenous," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(3), pages 531-550, 09.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-23 (All new papers)
- NEP-BEC-2005-05-23 (Business Economics)
- NEP-URE-2005-05-23 (Urban & Real Estate Economics)
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