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Technological Determinants of the Group-Size Paradox

Author

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  • Martin Kolmar
  • Hendrik Rommeswinkel

Abstract

The present paper analyzes situations in which groups compete for rents. A major result in the literature has been that there are both cases where larger groups have advantages and cases where they have disadvantages. The paper provides two intuitive criteria which for groups with homogenous valuations of the rent determine whether there are advantages or disadvantages for larger groups. For groups with heterogenous valuations the complementarity of group members’ efforts is shown to play a role as a further factor.

Suggested Citation

  • Martin Kolmar & Hendrik Rommeswinkel, 2011. "Technological Determinants of the Group-Size Paradox," CESifo Working Paper Series 3362, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3362
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp3362.pdf
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    References listed on IDEAS

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    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    2. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    3. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    4. Thierry Pénard & Sylvain Dejean & Raphaël Suire, 2011. "Olson’s Paradox Revisited: An Empirical Analysis of Incentives to Contribute in P2P File-sharing Communities," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201105, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    5. Stein, William E, 2002. "Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-336, December.
    6. Wolfgang Leininger, 2003. "On evolutionarily stable behavior in contests," Economics of Governance, Springer, vol. 4(3), pages 177-186, November.
    7. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 48-55, February.
    8. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Cooperation in collective action," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(3), pages 473-498, July.
    9. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
    10. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
    11. Paul Pecorino & Akram Temimi, 2008. "The Group Size Paradox Revisited," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 785-799, October.
    12. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 345-357, November.
    13. Joan Esteban & Debraj Ray, 2008. "On the Salience of Ethnic Conflict," American Economic Review, American Economic Association, vol. 98(5), pages 2185-2202, December.
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    Citations

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    Cited by:

    1. María Cubel & Santiago Sanchez-Pages, 2014. "Difference-form group contests," Working Papers 2014/6, Institut d'Economia de Barcelona (IEB).
    2. Kolmar, Martin, 2013. "Group Conflicts. Where do we stand?," Economics Working Paper Series 1331, University of St. Gallen, School of Economics and Political Science.
    3. Cubel Maria & Sanchez-Pages Santiago, 2012. "The effect of within-group inequality in a conflict against a unitary threat," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(3), pages 1-11, December.
    4. repec:bpj:pepspp:v:18:y:2012:i:3:p:11:n:14 is not listed on IDEAS

    More about this item

    Keywords

    contests; public goods; group-size paradox;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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