The Optimal Size for a Minority
AbstractWe investigate a setting in which members of a population, bifurcated into a majority and a minority, transact with randomly matched partners. All members are uniformly altruistic, and each transaction can be carried out cooperatively or through a market mechanism, with cooperative transactions saving on transaction costs. Externalities are introduced, whereby cooperation by members of one group and the relative size of that group, affect the incentives to cooperate by members of the other group. Under these conditions, we determine the optimal size of the minority from the minority’s perspective, and consider the conditions under which such a size might be attained. The model provides insights on social conflicts both between groups and within groups.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 284.
Length: 40 pages
Date of creation: Apr 2001
Date of revision:
Publication status: published in: Journal of Economic Behavior and Organization, 2003, 52 (1), 27-45
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, and Immigrants; Non-labor Discrimination
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
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