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Group Formation and Heterogeneity in Collective Action Games

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Author Info
Maruta, Toshimasa
Okada, Akira
Abstract

We present a simple model of voluntary groups in a collective action problem where individuals differ in their willingness to cooperate. The heterogeneity of individuals' preferences generally yields multiple equilibrium groups with different levels of cooperation. Voluntary participation in a binding contract to cooperate does not necessarily lead to the full cooperation. Applications to voluntary provision of public goods and cartel formation in oligopolistic markets are discussed.

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File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/16922/1/070econDP05-07.pdf
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Publisher Info
Paper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number 2005-07.

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Length: 26 p.
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:hit:econdp:2005-07

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Related research
Keywords: group formation; collective action; heterogeneous preferences; voluntary participation;

Find related papers by JEL classification:
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

Cited by:
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  1. Taiji Furusawa & Hideo Konishi, 2008. "Contributing or Free-Riding? Voluntary Participation in a Public Good Economy," Boston College Working Papers in Economics 681, Boston College Department of Economics, revised 14 Jul 2009. [Downloadable!]
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This page was last updated on 2009-12-8.

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