Advanced Search
MyIDEAS: Login to save this paper or follow this series

Endogenous Group Formation via Unproductive Costs

Contents:

Author Info

  • Jason Aimone

    (George Mason University)

  • Laurence R. Iannaccone

    (Chapman University)

  • Michael D. Makowsky

    ()
    (Department of Economics, Towson University)

  • Jared Rubin

    (California State University, Fullerton)

Abstract

How and why do groups form? In many cases, group formation is endogenous to the actions that individual members take and the norms associated with these actions. In this paper, we conduct an experiment that allows groups to form endogenously in the context of the classic voluntary contribution mechanism public goods game. We identify unproductive costs – “sacrifice” – as a mechanism for endogenous group formation, a result which is consistent with the “sacrifice and stigma” theory of religious groups. We find that changes in relative prices (between private and public goods) act to screen out free-riders, subjects who choose high-sacrifice groups contribute more to the public good once in these groups, and moderate welfare gains are available to those who voluntarily incur unproductive costs.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.towson.edu/cbe/economics/workingpapers/2010-15.pdf
File Function: Second version, 2010
Download Restriction: no

Bibliographic Info

Paper provided by Towson University, Department of Economics in its series Working Papers with number 2010-15.

as in new window
Length: 48 pages
Date of creation: Aug 2010
Date of revision: Sep 2010
Handle: RePEc:tow:wpaper:2010-15

Contact details of provider:
Postal: Towson, Maryland 21252-0001
Phone: 410-704-2959
Fax: 410-704-3424
Web page: http://www.towson.edu/cbe/economics/
More information through EDIRC

Related research

Keywords: Endogenous Group Formation; Laboratory Experiment; Free Riding; Public Goods Game; Voluntary Contribution Mechanism; Sacrifice; Unproductive Costs.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Giorgio Coricelli & Dietmar Fehr & Gerlinde Fellner, 2003. "Partner selection in public goods experiments," Papers on Strategic Interaction 2003-13, Max Planck Institute of Economics, Strategic Interaction Group.
  2. Bohnet, Iris & Kubler, Dorothea, 2005. "Compensating the cooperators: is sorting in the prisoner's dilemma possible?," Journal of Economic Behavior & Organization, Elsevier, vol. 56(1), pages 61-76, January.
  3. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
  4. Talbot Page & Louis Putterman & Bulent Unel, 2002. "Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry and Efficiency," Working Papers 2002-19, Brown University, Department of Economics.
  5. Eli Berman & Laurence R. Iannaccone, 2005. "Religious Extremism: The Good, The Bad, and The Deadly," NBER Working Papers 11663, National Bureau of Economic Research, Inc.
  6. Kurtis Swope, 2002. "An Experimental Investigation of Excludable Public Goods," Experimental Economics, Springer, Springer, vol. 5(3), pages 209-222, December.
  7. Eli Berman, 1998. "Sect, Subsidy, and Sacrifice: An Economist's View of Ultra-Orthodox Jews," NBER Working Papers 6715, National Bureau of Economic Research, Inc.
  8. Daniel Houser & Erte Xiao & Kevin McCabe & Vernon Smith, 2005. "When Punishment Fails: Research on Sanctions, Intentions and Non- Cooperation," Experimental, EconWPA 0502001, EconWPA, revised 18 Feb 2005.
  9. Michael D. Makowsky, 2012. "Emergent Extremism In A Multi‐Agent Model Of Religious Clubs," Economic Inquiry, Western Economic Association International, vol. 50(2), pages 327-347, 04.
  10. Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 123(3), pages 1111-1159, August.
  11. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(2), pages 271-91, April.
  12. Erte Xiao & Daniel Houser, 2005. "Emotion expression in human punishment behavior," Experimental, EconWPA 0504003, EconWPA, revised 18 May 2005.
  13. Roberto Burlando & Francesco Guala, 2005. "Heterogeneous Agents in Public Goods Experiments," Experimental Economics, Springer, Springer, vol. 8(1), pages 35-54, April.
  14. Charles Noussair & Steven Tucker, 2005. "Combining Monetary and Social Sanctions to Promote Cooperation," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 43(3), pages 649-660, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kimbrough Erik O. & Vostroknutov Alexander, 2012. "Rules, Rule-Following and Cooperation," Research Memorandum 054, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  2. Eva Ranehill & Frédéric Schneider & Roberto A. Weber, 2014. "Growing Groups, Cooperation, and the Rate of Entry," CESifo Working Paper Series 4719, CESifo Group Munich.
  3. Erik O. Kimbrough & Jared Rubin & Roman M. Sheremeta & Timothy Shields, 2013. "Commitment Problems in Conflict Resolution," Working Papers 13-11, Chapman University, Economic Science Institute.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tow:wpaper:2010-15. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Juergen Jung).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.